Which of the Following Statements About Output Gaps Is True

question 127

Multiple Choice

Which of the following statements about output gaps is true?

• A)When actual GDP is below potential GDP,there is upward pressure on wages.
• B)When actual GDP is below potential GDP,there is upward pressure on output prices.
• C)When actual GDP is above potential GDP,there is downward pressure on wages.
• D)When actual GDP is above potential GDP,there is downward pressure on output prices.
• E)When actual GDP is above potential GDP,there is upward pressure on wages.

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Definitions:

Discount Periods

Time frames during which a payer can make payment less than the nominal amount due before a specified due date to receive a discount.

Discount Rate

The interest rate charged by central banks for loans to commercial banks or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

Present Value

The present worth of a future amount of money or series of cash flows, considering a certain rate of return.

Rate Of Return

A measure of the gain or loss on an investment over a specified period, expressed as a percentage of the investment’s initial cost.