Unit13

Question 1

Reverse causality

Answer 1

A 2way casual relationship in which A affects B and B also affects A.

Question 2

Linear regression line

Answer 2

The best fitting line through a set of data

Question 3

Gross Domestic Product (GDP)

Answer 3

A measure of the market value of the output of the economy in a given period.

Question 4

Recession

Answer 4

A period when output is declining. It only ends when an economy begins to grow again.

A period when the level of output is below the normal level even when th economy is growing.

Question 5

Business cycle

Answer 5

Alternating periods of faster or slower growth rates.The economy goes from a boom back to a recession back to a boom.

Question 6

Okun’s Law

Answer 6

The empirical regularity that changes in the rate of growth of GDP are negatively correlated with the rate of unemployment.

Question 7

Okun’s coefficient

Answer 7

The change in the unemployment rate in percentage points predicted to be associated with a 1% change in the growth rate of GDP.