Which of the following about potential GDP is true?
a. During a recession, actual GDP will exceed potential GDP.
b. Actual GDP cannot exceed potential GDP, even for short periods.
c. Actual output may be either above or below potential output depending on how fully resources are utilized.
d. The economy's potential output is the maximum output that could be achieved temporarily during a time of economic boom.
C
You might also like to view...
The monetary expansion process from an open market operation continues until
A) required reserves are eliminated. B) the Federal Reserve takes actions to stop the process. C) the discount rate is lower than market interest rates. D) excess bank reserves are eliminated.
A common mistake made by consumers is the failure to take into account the sunk costs of their actions
Indicate whether the statement is true or false