Potential Output

question 36

Multiple Choice

Potential output

• A)is defined as the level of real output that the economy could produce at high rates of resource utilization.
• B)only occurs when both the unemployment rate and inflation rate are zero.
• C)can be estimated by choosing benchmark measures of high resource utilization.
• D)Both a and c

---

Definitions:

Assets

Economic resources or owned items of value that an individual, corporation, or country possesses, expected to provide future benefits.

Net Income

Net income refers to the total earnings of a company once all costs, expenses, and taxes are deducted from the overall revenue.

Debt-to-Total-Assets Ratio

The debt-to-total-assets ratio measures the percentage of a company's assets financed by creditors, indicating the degree of financial leverage.

Du Pont Equation

A formula that breaks down the components of a company's return on equity into three parts: operating efficiency, asset use efficiency, and financial leverage.