Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 3.

Match the vocabulary to the proper definition. in probability, two events in which 1. conditional probability the outcome of one event is independent of the outcome of a second event. 2. dependent events in probability, two events in which the outcome of one event is dependent on the outcome of a second event. the probability of an event in which the outcome of the event is conditional on the outcome of one or more different events. 3. independent events