Which of the Following Statements Is True

question 75

Multiple Choice

Which of the following statements is true?

• A)Real GDP fluctuates around potential GDP.
• B)Potential GDP fluctuates around real GDP.
• C)Real GDP is something like an average of GDP.
• D)The growth rate of potential GDP is well known and generally agreed upon.
• E)Real GDP cannot be any greater than potential GDP.

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Definitions:

Budget Act

A legislative act that governs budgetary allocations and the process of budget creation and approval by a government.

Marginal Tax Rate

Additional taxes paid divided by taxable income.

Liberal Economists

Liberal economists advocate for minimal government intervention in the economy, emphasizing free markets, free trade, and the importance of individual choice and freedoms in economic matters.

Conservative Economists

Economists who generally advocate for reduced government spending, lower taxes, and minimal government intervention in the economy.