What Is Potential or Full-Employment Output

question 92

Multiple Choice

What is potential or full-employment output?

• A)the maximum GDP that an economy actually achieves throughout its entire history
• B)achieved during periods when all of the labour force is employed
• C)a goal that can never be achieved by the economy
• D)the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use
• E)the GDP that could be produced if the economy's resources were fully employed at their maximum intensity of use

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Definitions:

Quota

A trade limitation enforced by the government, restricting the quantity or financial value of products that can be exported or imported over a set timeframe.

Open-Economy Model

An economic model that considers the impact of trade and financial flows with other countries on the domestic economy.

Net Exports

The disparity between the total amount a country exports and the total amount it imports.

Interest Rate

The percentage charged on borrowed money, or paid to investors, indicating the cost or profit of borrowing or lending.