When Real GDP Exceeds Potential GDP, Then the Economy Is

question 181

Multiple Choice

When real GDP exceeds potential GDP, then the economy is in

• A) below full- employment equilibrium.
• B) a trough.
• C) an inflationary gap situation.
• D) a recessionary gap situation.

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Definitions:

Conflict Theory

A sociological perspective that views social life as a competition, and focuses on the distribution of resources, power, and inequality.

Industrial Revolution

A period of significant technological, socioeconomic, and cultural change that started in the 18th century, marked by the transition from manual production methods to machine-based manufacturing.

Communist Revolution

A social and political movement aiming to overthrow capitalism and establish a society without class divisions, where the means of production are communally owned.

Domestic Labour

Refers to the unpaid work done within the household, such as cleaning, cooking, and childcare, traditionally undertaken by women.