If ______ equilibrium output _______, the price level rises.
a) actual; is below potential GDP
b) potential; is equal to actual GDP
c) potential; exceeds actual GDP
d) actual; exceeds potential GDP
Answer: d) actual; exceeds potential GDP
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Which branch of economics is most likely to study differences in countries' growth rates?
A. macroeconomics B. microeconomics C. experimental economics D. normative economics
If the price elasticity of demand is greater than 1, then consumer demand is
A) unrelated to the elasticity of demand. B) inelastic. C) elastic. D) unitary elastic.
One goal of rate-of-return regulation is the prevention of
A. free market entry. B. environmental degradation. C. positive economic profits. D. poor quality service.
If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:
a. the firm should try to produce less output. b. total fixed costs are constant along the LRAC curve. c. there are economies of scale. d. the firm is probably having significant management problems. e. when output is doubled, total costs are doubled.