In the Macroeconomic Short Run

question 134

Multiple Choice

In the macroeconomic short run,

• A) actual real GDP may be less than or more than potential GDP.
• B) actual real GDP always equals potential GDP.
• C) the unemployment rate is zero.
• D) the economy is always moving away from full employment.

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Definitions:

Material

The substance or substances of which any physical object is composed or can be made, including metals, woods, plastics, and textiles.

Location

A specific place or position, often used in various contexts to define where something is situated or found.

Moral Hazard

A situation in which one party is more willing to take risks because the costs that may result will not be borne by them.

Adverse Selection

A situation in which asymmetric information leads to the market being dominated by inferior products or by participants who are at a disadvantage.