In Beyonceland, Real GDP Fell Continuously from $200 Billion in 2015

question 39

Multiple Choice

In Beyonceland, real GDP fell continuously from $200 billion in 2015 to $160 billion in 2016. Potential GDP remained constant at $180 billion. Between 2015 and 2016, Beyonceland

• A) went from a peak to a trough.
• B) went from expansion to contraction.
• C) went from a deflationary gap to an inflationary gap.
• D) went from a positive output gap to a negative output gap.
• E) had a growth rate of -25 percent.

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Definitions:

Correlational

Pertaining to a statistical relationship between two or more variables, indicating how one may predict or relate to another.

Causal

Relating to or acting as a cause for something, indicating a relationship where one event or action leads to the occurrence of another.

Experimental

Relating to a method of inquiry in sciences that involves controlled testing of hypotheses to establish cause-and-effect relationships.

Observational

Relating to the method of gaining knowledge by watching and analyzing without direct involvement or interference.