If the Economy Is in Short- Run Equilibrium, Then

question 4

Multiple Choice

If the economy is in short- run equilibrium, then

• A)real GDP can be greater than, less than or equal to potential GDP.
• B)real GDP equals potential GDP.
• C)real GDP cannot be equal to potential GDP.
• D)nominal GDP equals potential GDP.

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Definitions:

Net Income

The total profit or earnings of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as wages, rent, and utilities, excluding capital expenditures and cost of goods sold.

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, assets, equity, or other financial metrics.