If Real GDP Is Greater Than Potential GDP, We Would

question 7

Multiple Choice

If real GDP is greater than potential GDP, we would expect

• A)the expected future inflation rate to decrease.
• B)the money wage rate to fall.
• C)the money wage rate to rise.
• D)potential GDP to increase.
• E)potential GDP to decrease.

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Definitions:

Exponentiation

A mathematical operation involving the raising of one number to the power of another.

Variable Substitution

In mathematics, this involves replacing variables with other variables or values to simplify expressions or solve equations.

Mathematical Expression

A combination of numbers, operations, and sometimes variables that represents a mathematical relationship or value.

Exponentiation

The mathematical operation involving the raising of a number to the power of another number.