Suppose That Potential Output Is $6 Trillion and Real GDP

question 93

Multiple Choice

Suppose that potential output is $6 trillion and real GDP is currently $5.5 trillion. In the long run, we would expect that:

• A) wages and input prices will fall.
• B) the price level will rise.
• C) real GDP will fall.
• D) all of the above

Understand the role of creativity in problem-solving and decision-making.

Grasp the concept of critical thinking and its importance in evaluating information and arguments.

Identify the steps involved in the problem-solving process and recognize their flexibility.

Acknowledge the significance of self-awareness and reflection in personal and professional growth.

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Definitions:

Payout Ratio

A financial metric that measures the proportion of earnings paid out to shareholders in the form of dividends, usually expressed as a percentage.

Earnings Growth

The increase in a company's earnings over a specified period, indicating financial health and profitability potential.

Income Stream

Income stream is a consistent flow of money received from an investment, work, or property over a period of time.

Dividends

Payments made by a corporation to its shareholders, usually in the form of cash or additional shares, from its net profits.