If Real GDP Is Less Than Potential GDP, Then the Money

question 69

Multiple Choice

If real GDP is less than potential GDP, then the money wage rate_{------------------} , aggregate supply_{--------------------} so that the price level _{--------------------}.

• A)rises; decreases; rises
• B)falls; decreases; rises
• C)rises; increases; falls
• D)falls; increases; falls
• E)does not change; increases; falls

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Definitions:

Factor of Production

An input used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community.

Education and Knowledge

Education and knowledge pertain to the process of acquiring information, skills, values, and understanding through experiences, schooling, and study, which collectively empower individuals and societies.

Factor Distribution

Refers to the way in which income is distributed among the factors of production, typically labor, capital, and land.