An Above Full-Employment Equilibrium Occurs When

question 390

Multiple Choice

An above full-employment equilibrium occurs when

• A) the equilibrium level of real GDP is greater than potential GDP.
• B) the equilibrium level of real GDP is less than potential GDP.
• C) short-run aggregate supply decreases while neither aggregate demand nor long -run aggregate supply changes.
• D) aggregate demand decreases while neither the short-run nor long-run aggregate supply changes.

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Definitions:

Marginal Benefit

The additional satisfaction or value gained from consuming or producing one more unit of a good or service.

Tax Cost

The financial charges associated with taxation, including the actual tax payment as well as any related compliance or administrative expenses.

Resources Allocation

The process of distributing available resources among various competing needs and desires to achieve optimal efficiency.

Majority Voting

A process of making decisions where the choice that gets over fifty percent of the votes prevails.