A Recessionary Output Gap Is Characterized by

question 2

Multiple Choice

A recessionary output gap is characterized by

• A)rising prices.
• B)constant prices.
• C)real output that varies one-for-one with aggregate demand.
• D)real GDP exceeding potential output.
• E)real GDP falling below potential output.

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Definitions:

Compute Correlation

The process of determining the degree to which two variables are related or move together, often measured by correlation coefficients such as Pearson's r.

Standard Deviation

The average amount of variability in a set of scores or the scores’ average deviation from the mean.

Compute Mean

The process of calculating the arithmetic average of a set of numbers by summing them up and dividing by the count of numbers.

Predictors

Variables used in regression analysis to forecast the value of an outcome variable.