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The Amount by Which Actual Output Falls Short of Potential

question 74

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The amount by which actual output falls short of potential output is called:


Definitions:

Aggregate Demand

Aggregate demand is the total demand for all goods and services within an economy at a given overall price level and within a given time period.

Aggregate Supply

The sum total of products and services that corporate entities in an economic environment plan to market over a fixed period.

Expected Price Level

The anticipated average price of goods and services in the economy over a future period.

Short-Run Aggregate Supply Curve

It depicts the relationship between the price level and the quantity of goods and services that firms are willing and able to produce in the short run, while some production costs are fixed.

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