Potential output is
A. the level of real GDP that exists when the economy is experiencing only frictional and cyclical unemployment.
B. the level of real GDP that exists when the quantity of labor supplied is equal to the quantity of labor demanded.
C. the level of real GDP that exists when the actual rate of unemployment is zero.
D. the level of real GDP that exists when the economy is experiencing only cyclical and structural unemployment.
Ans: B. the level of real GDP that exists when the quantity of labor supplied is equal to the quantity of labor demanded.
You might also like to view...
Payments by the government to the public for which the government receives no current goods or services in return are called:
A. transfer payments. B. net taxes. C. public saving. D. capital losses.
Refer to the above table. The market quantity supplied when the price is $6 is
A) 0. B) 5. C) 10. D) 20.
You sell your good in a perfectly competitive market where the market price is $7.00. When you sell 100 units your total revenue is $700. When you sell 101 units:
A. total revenue increases by less than $7. B. total revenue increases by exactly $7. C. total revenue increases by more than $7. D. total revenue may increase or decrease.
Assume a machine that has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,300. If the firm finds it can
borrow funds at an interest rate of 10 percent, the firm should: A. not purchase the machine because the expected rate of return exceeds the interest rate. B. not purchase the machine because the interest rate exceeds the expected rate of return. C. purchase the machine because the expected rate of return exceeds the interest rate. D. purchase the machine because the interest rate exceeds the expected rate of return.