Potential GDP is the output that would be produced if the economy was experiencing:
A. No unemployment
B. Free markets and international trade
C. No inflation
D. Full employment
D. Full employment
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In reality, the Fed is unable to use monetary policy to keep real GDP exactly at its potential level
Indicate whether the statement is true or false
In the long-run equilibrium for a perfectly competitive firm, price equals which of the following?
a. price. b. minimum short-run average total cost. c. short-run marginal cost. d. All of these.
A jeweler cut prices in his store by 20% and the dollar value of his sales fell by 20%. This is indicative of: a. elastic demand
b. inelastic demand. c. perfectly elastic demand. d. perfectly inelastic demand.
On the Lorenz curve, which of the following indicates that income inequality has increased from Year A to Year B?
a. The Year B line is to the left of the perfect equality line, and the Year A line is to the right. b. The Year A line is longer than the Year B line. c. The Year B line is farther from the perfect equality line than is the Year A line. d. The Year A line is farther from the perfect equality line than is the Year B line.