Short-Run Macroeconomic Equilibrium Occurs When the Quantity of Real GDP

question 296

Multiple Choice

Short-run macroeconomic equilibrium occurs when the quantity of real GDP demanded .

• A) equals the quantity of real GDP supplied
• B) does not equal full-employment GDP
• C) equals full-employment GDP
• D) equals potential GDP

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Definitions:

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if a particular activity is discontinued.

Irrelevant Costs

Costs that should not influence decision-making because they will not change regardless of the outcome.

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered or altered by current or future actions.

Decision Making

Selecting a course of action from competing alternatives.