If Real GDP Is Less Than Potential GDP

question 105

Multiple Choice

If real GDP is less than potential GDP,

• A)the price level will not change.
• B)the rate of inflation will not change.
• C)the rate of inflation will increase.
• D)the rate of inflation will decrease.
• E)the price level will fall.

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Definitions:

Subsidiary Accounts

Detailed records that support and summarize information in a controlling account, often used for individual items or customers.

Cash Refund

An amount paid by the seller to the buyer for merchandise that is defective, is damaged during shipment, or does not meet the buyer’s expectations.

Cash Payments Journal

The special journal in which all cash payments are recorded.

Account Receivable

Money owed to a company by its debtors for goods or services that have been delivered or sold but not yet paid for.