A characteristic of long-run equilibrium is the economy is producing its potential output. This is:
A. defined as using 80 percent of the economy's resources at any time.
B. the level of output consistent with an unemployment rate of 7.5%.
C. the level of output the economy produces when its resources are used at normal rates.
D. the maximum level of output the economy could produce at any time.
Answer: C
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When full employment is present in the United States:
a. the rate of unemployment will fall to zero. b. the actual rate of unemployment will be less than the natural rate of unemployment. c. approximately 95 percent of the adult population will be employed. d. approximately 95 percent of the labor force will be employed.
Describe the pressures that discourage trade.
What will be an ideal response?
A firm produces 4,000 units of output using 500 workers. Marginal cost is $10, the wage rate is $160, and total fixed cost is $100,000.When output is 4,000 units,
A. average variable cost is decreasing. B. average total cost is increasing. C. average total cost is decreasing. D. average variable cost is increasing. E. both a and c
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.