Recessionary Gaps Are Associated with Output Below Potential and High

question 12

True/False

Recessionary gaps are associated with output below potential and high unemployment rates.

---

Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.

Confirmation Bias

The tendency to view events and people in ways that fit how we want and expect them to be.

Causal Attribution

The process by which individuals explain the causes of behavior and events, attributing them to internal dispositions or external situations.

Fundamental Attribution Error

The tendency for observers to overestimate personality or dispositional causes for someone else's behavior and underestimate situational influences.