The Level of Statistical Significance

question 27

Multiple Choice

The level of statistical significance

• A)is not related to random error.
• B)should be 5% or smaller by rule of thumb.
• C)is irrelevant to inferential statistics.
• D)is the same as standard deviation.

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Definitions:

Potential Output

The maximum amount of goods and services an economy can produce when it is most efficiently utilizing its resources.

Expansionary Gap

A situation in an economy where actual gross domestic product exceeds the potential GDP, leading to inflationary pressures.

Natural Rate

The level of economic output at which the rate of inflation is stable, often related to the concept of the natural rate of unemployment where the labor market is in equilibrium.

Consumer Price Index

A metric that analyzes the weighted average cost of a selection of consumer goods and services, such as medical care, transportation, and food, to measure inflation.