Use the Following Figure to Answer the Questions

question 63

Multiple Choice

Use the following figure to answer the questions : Figure9.9

- Using Figure 9.9,and assuming the full-employment output level is $50 billion,

• A)There is an inflationary gap of $50 billion income.
• B)There is a recessionary gap of $50 billion income.
• C)There is an inflationary gap of $25 billion income.
• D)The economy is at macro equilibrium.

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Definitions:

Unit Variable Cost

The cost that varies with each unit of product produced, encompassing materials and labor but not fixed costs.

Sales Required

The minimum sales needed to achieve a specific financial goal or to cover costs.

Variable Cost

Costs that vary directly with the level of production or output.

Break-even Point

The level of production or sales at which total revenues equals total expenses, with no net loss or gain.