The difference between actual and potential GDP is called
A. an output gap.
B. the output differential.
C. a gap shortage.
D. the output resistance.
Answer: A
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If the MPC is 0.5 and the tax rate is 10%, a $500 increase in autonomous government purchases will increase equilibrium income by
A) $225. B) $280. C) $910. D) $1,110.
Suppose that velocity and output are constant and that the quantity theory and the Fisher effect both hold. What happens to inflation, real interest rates, and nominal interest rates when the money supply growth rate increases from 5 percent to 10 percent?
It is likely that ______________ has an income elasticity less than 1, and _____________ have an income elasticity more than 1.
A. coffee; sailboats B. sailboats; cars C. vacations; cell phones D. filet mignon; chicken
Having a well-known brand name associated with high quality is
A. can take a long time to establish. B. is a value to consumers. C. can be costly to maintain. D. All of these statements are true.