Which of the Following Statement or Statements Are Correct About

question 48

Multiple Choice

Which of the following statement or statements are correct about potential GDP?
I. Actual real GDP equals potential GDP when the economy is at full employment.
Ii. Real GDP can be less than potential GDP.
Iii. When real GDP equals potential GDP, it also equals nominal GDP.

• A)i, ii, and iii
• B)i only
• C)i and ii
• D)ii and iii
• E)ii only

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Definitions:

Economic Profits

The difference between a firm’s total revenue and its total costs, including both explicit and implicit costs, indicating the financial success beyond breaking even.

Profit-maximizing Firm

A business whose goal is to achieve the highest possible financial gain by adjusting production and pricing strategies based on market conditions.

Price-taker Market

A market situation where individual sellers or buyers have no influence over the price of a product, accepting the prevailing market price as given.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes as more units are produced.