Economic activity that is above potential output ________
A) signals that potential output is about to increase
B) is not possible
C) results from an economic shock to which the economy has yet to adjust fully
D) occurs near the trough, rather than the peak, of a business cycle
E) none of the above
C
You might also like to view...
A cash register at a coffee shop should be considered
A. real capital. B. either financial or real capital. C. financial capital. D. none of the choices is correct.
The payoff matrix below shows the payoffs (in millions of dollars) for two firms, A and B, for two different strategies, investing in new capital or not investing in new capital. 
An industry spy comes to firm B and claims to know what firm A has decided. Given that each firm already knows the payoff matrix, how much would this information be worth to firm B?
A. $30 million. B. $0. C. $70 million. D. $50 million.
Government policymakers would like to have high ________ and low ________.
A. output growth; unemployment and inflation B. output growth and inflation; unemployment C. inflation; unemployment and output growth D. unemployment and output growth; inflation
If marginal cost equals average variable cost, average variable cost will
A. decrease. B. increase. C. be maximized. D. be minimized.