If real GDP exceeds potential GDP, this means that
a. output is below the level produced at the benchmark rate for high employment and high rate of resource utilization.
b. this cannot occur; the economy can never be at a point where real GDP exceeds potential GDP.
c. cyclical output is above what the economy can sustain in the long-run.
d. the economy is expanding.
C
You might also like to view...
Over the past twenty years, the number of small family farms has fallen significantly and in their place there are fewer, but larger, farms owned by corporations. Which of the following best explains this trend?
A) diminishing returns to labor in farming B) declining productivity C) diseconomies of scale in farming D) economies of scale in farming
Explain the ways in which the government can persuade private businesses to invest more in order to speed up the process of capital formation?
Figure 10-7
?
?
Which of the diagrams in Figure 10-7 represents a period of economic growth and inflation?
A. (A) B. (B) C. (C) D. (D)
A decrease in autonomous consumption would have the same effect on the expenditures schedule as a(n)
A. decrease in investment. B. increase in government purchases. C. increase in net exports. D. decrease in taxes.