When the Price Level Is Rising and Simultaneously Real GDP

question 242

Multiple Choice

When the price level is rising and simultaneously real GDP is decreasing

• A) the natural unemployment rate increases.
• B) stagflation occurs.
• C) there is an expansionary gap.
• D) the Fed has increased the discount rate.

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Definitions:

Critical Value

A point on the scale of a statistical distribution that corresponds to a specified level of significance, used in hypothesis testing to determine whether to reject the null hypothesis.

Alpha

The significance level in statistical tests, denoting the probability threshold at which the null hypothesis is rejected in favor of the alternative hypothesis.

Chi-Square

A statistical method employed to assess if there is a meaningful association between two variables of categorical type.

Degrees of Freedom (df)

The number of independent values or quantities that can vary in the statistical analysis.