Potential output is:
A. equal to actual output.
B. the same as the natural rate of unemployment.
C. also known as the output gap.
D. the maximum sustainable amount of output.
Answer: D
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A market surplus occurs if the quantity:
A) demanded is greater than the quantity supplied. B) demanded is less than the quantity supplied. C) demanded is equal to the quantity supplied. D) supplied is less than the quantity demanded.
The main reason that hyperinflation renders a currency worthless is that ________
A) the government cannot print money fast enough to keep up with the rising prices B) laws against raising prices are easily evaded C) reducing government expenditures is politically unpopular D) the government's "official" inflation rate is always a gross understatement E) as soon as inflation seems out of control, everyone knows that the currency will soon lose whatever value it has today