To what does the "GDP gap" refer?
a. The difference between real and nominal GDP.
b. The difference between this year's real GDP and last year's GDP.
c. The difference between "full-employment" real GDP and actual real GDP.
d. The difference between real GDP in the prior trough and real GDP in a current trough of the business cycle.
c
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The situation in which a firm is able to charge the maximum price consumers are willing to pay for each unit of output the firm sells is referred to as:
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) fourth-degree price discrimination.
Bailey's Barber Shop knows that a 5% increase in the price of their haircuts results in a 15% decrease in the number of haircuts purchased. What is the elasticity of demand facing Bailey's Barber Shop?
a. 0.05 b. 0.10 c. 0.33 d. 3.0