Potential Real GDP Is $10,000 and the Current Level of Real

question 253

Multiple Choice

Potential real GDP is $10,000 and the current level of real GDP is $9,000. The output gap is therefore _____%.

• A) -90
• B) -110
• C) -10
• D) 10

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Definitions:

Price-Earnings Ratio

The Price-Earnings Ratio (P/E Ratio) is a financial metric used to evaluate the value of a company's shares, calculated by dividing the current market price of a stock by its earnings per share.

Return On Total Assets

A financial ratio that measures the profitability of a company relative to its total assets.

Year 2

This refers to the second year of a business or financial operation, often used in context to compare data year-over-year.

Earnings Per Share

A company's net profit divided by the number of its outstanding shares, indicating the portion of a company's profit allocated to each share of stock.