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Suppose an Economy Currently Has Total Output of $7 Trillion

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Suppose an economy currently has total output of $7 trillion and an unemployment rate of 4%.Using Okun's rule of thumb,how would output change if unemployment decreased to 3.5%?


Definitions:

Phi Coefficient

A metric indicating the strength and direction of the relationship between two dichotomous variables, with values spanning from -1 to 1.

Partial Correlation

A measure of the relationship between two variables, controlling for the effect of one or more other variables.

Mediating Variable

A variable that explains the relationship between the independent variable and the dependent variable in a statistical model.

Coefficient Of Determination

The amount of variance in one variable that is accounted for by the variance in another variable.

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