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An alternative to Prescott's explanation of the cyclical behavior of the Solow residual is that it is the result of:
Significant
In a statistical context, denotes results that are unlikely to have occurred by chance, indicating a meaningful difference or relationship.
Type I Errors
False positive conclusions in statistical hypothesis testing, erroneously indicating that a novel effect exists.
Type II Errors
Occurs in hypothesis testing when the null hypothesis is falsely accepted, meaning that a real effect or difference is missed.
Sampling Distributions
The probability distribution of a statistic obtained from a large number of samples drawn from a specific population.
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