During an economic boom:
A. actual output exceeds potential output.
B. potential output exceeds quantity demanded.
C. potential output exceeds actual output.
D. aggregate demand exceeds aggregate supply.
Answer: A
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In the long-run, in a monopolistically competitive market:
a. marginal revenue is greater than average revenue. b. price equals marginal cost. c. price equals minimum average total cost. d. the firms earn positive economic profits. e. resources are inefficiently allocated .
Which of the following happens when a nation's net gains from trade are positive? a. Supporting industries of the traded good are created
b. Supporting industries of the traded good earn lower profits. c. All workers in the trading nation earn lower wages. d. The total surplus enjoyed by the trading nation decreases
The exchange rate of the Euro in terms of the US Dollar is currently:
(a) At parity. (b) Below parity. (c) Above parity. (d) Undefined.
It is often reported by financial news reports that higher interest rates reduce automobile sales. If this is true, we can expect
A. fiscal policy to be more effective. B. both fiscal and monetary policy to be more effective. C. monetary policy to be more effective. D. neither fiscal nor monetary policy to be more effective.