If Potential Output Equals $8 Billion and Actual Output Equals

question 50

Multiple Choice

If potential output equals $8 billion and actual output equals $10 billion, then this economy's output gap should be expressed as:

• A)$2 billion.
• B)20 percent.
• C)25 percent.
• D)−25 percent.

Convert between Celsius and Fahrenheit temperature scales and understand the underlying linear relationship.

Interpret the slope and intercept in the context of a given real-world problem.

Understand and apply the compound interest formula for both accumulation and discounting.

Compute increases in quantities using proportional relationships.

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Definitions:

Capital Intensity Ratio

A measure of how much capital is used in the production process, calculated as the ratio of total assets to sales.

Accounts Receivable

The financial obligations customers hold towards a company for products or services that have been served or benefited from, yet are unpaid.

Full Capacity

The maximum level of output that a company can sustain over a long period without increasing maintenance costs or causing wear and tear on its production assets.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming fiscal year, such as buildings, machinery, and equipment.