A Country Reports That Its Actual Real GDP Is Greater

question 110

Multiple Choice

A country reports that its actual real GDP is greater than its potential GDP. It must be that

• A)more workers decided to quit work in order to enjoy leisure time.
• B)the excess by which real GDP exceeds potential GDP is only temporary and eventually real GDP will decrease to be equal to potential GDP.
• C)an error was made when calculating actual real GDP.
• D)the price level is increasing.
• E)None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP.

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Definitions:

Standard Costs

Predetermined or estimated costs used for planning and control purposes in budgeting and cost management.

Stockholders

The owners of a corporation.

Standard Costs

Predetermined costs for materials, labor, and overhead that are used as benchmarks to evaluate actual production costs.

Technology

The application of scientific knowledge for practical purposes, especially in industry and in our daily lives to solve problems or create useful products.