Which of the following about potential GDP is true?
a. During a recession, actual GDP will exceed potential GDP.
b. Actual GDP cannot exceed potential GDP, even for short periods.
c. Actual output may be either above or below potential output depending on how fully resources are utilized.
d. The economy's potential output is the maximum output that could be achieved temporarily during a time of economic boom.
C
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________ increases the supply of dollars in the foreign exchange market
A) An increase in the exchange rate B) A decrease in the exchange rate C) A rise in the expected future exchange rate D) A fall in the interest rate in the U.S. relative to the interest rate in other countries E) A rise in the interest rate in the U.S. relative to the interest rate in other countries
Refer to the scenario above. You should use ________ to make your decision
A) backward induction B) forward induction C) mixed strategies D) your dominant strategy
A local cable company has its rates set at P = $15 by a regulatory commission. Its current output is 10,000 households and its costs are as follows: ATC = $17; AVC = $14; and MC = $15 . From this, we can tell that this is
a. a fair price, and the firm earns a normal profit b. a fair price, and the firm earns an economic loss c. marginal cost pricing, and the firm earns a normal profit d. marginal cost pricing, and the firm earns an economic loss e. the same price that an unregulated monopolist would charge
How can bonuses to exceptional employees be considered economic rents?