Potential Output Is

question 26

Multiple Choice

Potential output is

• A) the level of real GDP that exists when the economy is experiencing only cyclical and structural unemployment.
• B) the level of real GDP that exists when the quantity of labor supplied is equal to the quantity of labor demanded.
• C) the level of real GDP that exists when the actual rate of unemployment is zero.
• D) the level of real GDP that exists when the economy is experiencing only frictional and cyclical unemployment.

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Definitions:

Federal Income Tax

Tax levied by the federal government on individuals, corporations, estates, and other entities' annual earnings.

State Unemployment

A government-provided insurance program that offers temporary financial assistance to the unemployed who lost their jobs through no fault of their own.

Federal Unemployment

Refers to the United States federal government program that provides unemployment benefits to eligible workers.

FICA-OASDI

Refers to the Social Security portion of the Federal Insurance Contributions Act tax, used to fund the Social Security program in the United States.