If Actual Output Exceeds Potential Output, Eventually

question 66

Multiple Choice

If actual output exceeds potential output, eventually:

• A)input prices will rise and output will fall.
• B)both input prices and output will rise.
• C)input prices will fall and output will rise.
• D)both input prices and output will fall.

---

Definitions:

Land Account

A record in the financial statements that represents the cost of land owned by an entity, not depreciated over time.

Service Potential

Service potential refers to the future benefits or value that assets, especially non-financial ones, will provide to an entity over their useful life.

Accumulated Depreciation

The cumulative depreciation expense recorded for a fixed asset from the time it was initially utilized.

Fair Value

An estimate of the market value of an asset or liability based on current conditions.