A Country's Potential GDP Is Determined, in Part, by

question 98

Multiple Choice

A country's potential GDP is determined, in part, by

• A)the Okun Gap.
• B)the Lucas Wedge.
• C)demand and supply in the labor market.
• D)the equilibrium price level.
• E)actual real GDP.

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Definitions:

Variable Expenses

Costs that change in proportion to the activity of a business, such as raw materials and direct labor costs.

Fixed Expenses

Costs that do not change with the level of production or sales over a short period, such as rent or salaries.

Break Even

A financial situation where total costs equal total revenues, resulting in no net profit or loss.

Break-Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain for the business.