The idea that potential GDP is the sustainable upper limit of production means that
A) real GDP may be temporarily larger than potential GDP, but not permanently.
B) the economy is operating environmentally efficiently.
C) real GDP may be temporarily less than potential GDP.
D) inflation must always occur in a growing economy.
E) unemployment can only temporarily be zero in a healthy economy.
A
You might also like to view...
Consumers most likely decide on their current consumption spending by looking at their short-run income prospects.
Answer the following statement true (T) or false (F)
Which of the following factors strengthens the case for policy activism?
A) flexible wages B) lack of real-business-cycles C) sticky prices D) flexible prices
Refer to Figure 10.7. A movement from point D to point C could be caused by
A) a positive demand shock. B) an increase in the term premium investors expect in the future. C) an increase in the term structure effect. D) an increase in the expected rate of inflation.
A difference between economic regulation and social regulation is that
A) the former tends to affect the prices at which products are sold and the latter does not. B) the former tends to affect the profits of firms and the latter does not. C) the former tends to be specific to an industry and the latter tends to affect firms in all industries. D) the former tends to be done at the state level and the latter at the federal level.