If Real GDP Exceeds Potential GDP

question 175

Multiple Choice

If real GDP exceeds potential GDP,

• A) there can be a short- run equilibrium with a recessionary gap.
• B) there is neither a long- run nor a short- run equilibrium.
• C) there is a long- run and a short- run equilibrium.
• D) there can be a short- run equilibrium with an inflationary gap.

Comprehend the role of investments in education on future earnings and productivity.

Acknowledge the influence of compensating differentials and labor mobility on wage variations.

Analyze the implications of the principal-agent problem in labor markets.

Explore the concepts and effects of efficiency wages and shirking in labor economics.

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