If Actual Output Exceeds Potential Output, Eventually

question 66

Multiple Choice

If actual output exceeds potential output, eventually:

• A)input prices will rise and output will fall.
• B)both input prices and output will rise.
• C)input prices will fall and output will rise.
• D)both input prices and output will fall.

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Definitions:

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense over the asset's useful life, reducing its book value on the balance sheet.

Balance Sheet

A statement that displays the financial condition of a company, detailing assets, liabilities, and the equity of its shareholders at a given time.

Profit Margin

A financial metric that measures the percentage of revenue remaining after all expenses, taxes, and costs have been deducted.

Debt To Assets

A ratio that measures the proportion of a company's assets financed through debt, indicating financial leverage.