One lesson of the Great Depression was that potential GDP could _____
a. be too low to ensure full employment if the population was growing
b. be too low to ensure full employment in a capitalist economy
c. be too low to ensure full employment in a market economy
d. fall short of full-employment GDP
e. exceed equilibrium GDP
e
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Assume you and your cousin Vinny set up a partnership and your lawyer tells you that as the owners you will each face unlimited liability. What does that mean?
A) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable. B) Each of you could stand to lose your personal wealth if the business goes bankrupt. C) You are each liable for organizing the business. D) None of these explain what unlimited liability means.
A firm possesses too much capital if ________
A) the real rental cost of capital is equal to the marginal product of capital B) the real rental cost of capital is less than the marginal product of capital C) its investment spending exceeds its consumption outlays D) the real rental cost of capital is more than the marginal product of capital