In the Study of Short-Run Fluctuations in National Income,potential Income

question 25

Multiple Choice

In the study of short-run fluctuations in national income,potential income (output) is usually assumed to be

• A)falling at its average growth rate.
• B)moving together with potential output in neighbouring countries.
• C)constant.
• D)equal to actual income.
• E)irrelevant,as the economy is rarely there.

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Definitions:

Adaptive Ways

Strategies or mechanisms that individuals use to adjust to new conditions or environments in a positive manner.

Activity Theory

Theory of aging that holds that to age successfully a person must remain as active as possible.

Disengagement Theory

A theory suggesting that aging involves an inevitable process of withdrawal from social relationships and roles, leading to increased introspection and self-focus.

Compensation Theory

A hypothesis suggesting that individuals will excel in one area to balance out deficits in another area.