A Recessionary Gap Occurs When

question 197

Multiple Choice

A recessionary gap occurs when

• A) nominal GDP is less than potential GDP.
• B) nominal GDP is greater than potential GDP.
• C) real GDP is less than potential GDP.
• D) high rates of inflation occur.

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Definitions:

Stanford-Binet

The widely used American revision (by Terman at Stanford University) of Binet’s original intelligence test.

Mental Age

A measure of intelligence test performance devised by Binet; the chronological age that most typically corresponds to a given level of performance. Thus, a child who does as well as the average 8-year-old is said to have a mental age of 8.

Divergent Thinking

Divergent thinking is a thought process or method used to generate creative ideas by exploring many possible solutions, often leading to unique and unconventional outcomes.

Mental Age

A measure of an individual's cognitive ability as compared to the average cognitive ability for their chronological age.