If the Output Gap Equals -3.2 Percent, Then

question 8

Multiple Choice

If the output gap equals -3.2 percent, then

• A) cyclical unemployment equals the sum of structural and frictional unemployment.
• B) there is a recessionary gap.
• C) there is no cyclical unemployment.
• D) potential GDP is greater than actual GDP.

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Definitions:

Z-score

A statistic that tells you how many standard deviations a given value is from the mean.

Sample Mean

The average value of a sample set, calculated by summing all observations and dividing by the number of observations.

Sampling Distribution

The probability distribution of a statistic based on a large number of samples drawn from a specific population.

Sample Size

The number of individuals or observations included in a subset of a population for the purpose of statistical analysis.