What is the relationship between actual and potential real GDP?
What will be an ideal response?
Real GDP equals potential GDP when all resources are fully employed and there are no shortages that lead to inflation. Real GDP can be greater than potential GDP and can be less than potential GDP. During a business cycle, real GDP cycles around potential GDP. During an expansion, real GDP rises above potential GDP and during a recession real GDP falls below potential GDP.
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Which of the following features is included in the NAFTA Agreement?
I. a common tariff structure adopted by Canada, Mexico, and the United States II. elimination of tariffs on trade among Canada, Mexico, and the United States III. free mobility of labor and capital among Canada, Mexico, and the United States a. I b. II c. III d. I, II, and III
Policies designed to promote import substitution often encouraged capital-intensive production methods.
Answer the following statement true (T) or false (F)