Potential GDP Is Defined as the Level of Aggregate Output

question 8

Multiple Choice

Potential GDP is defined as the level of aggregate output at which

• A)there is only cyclical and frictional unemployment, and capital equipment is being used at 100 percent capacity.
• B)all factors of production are employed at their "normal" utilization rates.
• C)the unemployment rate is zero.
• D)there is only cyclical and structural unemployment.
• E)all factors of production are employed at 100 percent capacity.

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