Which of the Following Correctly Describes the Meaning of the Expression

question 86

Multiple Choice

Which of the following correctly describes the meaning of the expression Y < Y*?

• A)actual output is less than potential output - a recessionary gap
• B)potential output is less than actual output - a recessionary gap
• C)actual output is less than potential output - an inflationary gap
• D)potential output is less than actual output - an inflationary gap

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Definitions:

Positive and Significant

A description of statistical results indicating that an effect or difference is both greater than zero and statistically unlikely to be due to chance alone.

Significance Level

A statistical measure that determines the threshold of rejecting the null hypothesis, typically represented by alpha (α), such as 0.05 (5%).

Independent Variable

A variable in a statistical model that is manipulated to determine its effect on the dependent variable.

Linear Term

A component of an equation characterized by a variable raised to the first power, indicating a direct proportionality relationship.