In any year, real GDP
A) must always be less than potential GDP.
B) might be greater or less than potential GDP.
C) will always be greater than potential GDP because of the tendency of nations to incur inflation.
D) always equals potential GDP.
B
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Which of the following is true of bank reserves held at the Fed?
A) These reserves are a liability to the bank and an asset to the Fed. B) These reserves are a liability to both the bank and the Fed. C) These reserves are an asset to the bank and a liability to the Fed. D) These reserves are an asset to both the bank and the Fed.
In the monetarist view, if there is an increase in money growth then
a. the money supply and inflation will grow proportionally, with no effect on output and employment. b. the money supply grows faster than the inflation rate, with unfavorable effects on output and employment. c. the money supply grows faster than the inflation rate, leading to an increase in output and employment in the short-run. d. there will be no effect on output, employment, or inflation, in the long-run. e. both c and d.
What does Keynes’ law state?
a. Supply creates its own demand. b. Supply and demand always intersect. c. Demand creates its own supply. d. Government determines supply and demand.
Suppose in some economy there are 100 million workers; 10 million of those workers work in retail trade, and 1 million of the retail workers belong to unions. Total union membership in this economy is 40 million. The rate of unionization in retail trade
is: A. 1 percent. B. 10 percent. C. 40 percent. D. 100 percent.