In Macroland, Potential Output Equals $100 Trillion and the Natural

question 76

Multiple Choice

In Macroland, potential output equals $100 trillion and the natural rate of unemployment is 4 percent. If the actual unemployment rate is 3 percent, then real GDP equals:

• A)$97 trillion.
• B)$98 trillion.
• C)$101 trillion.
• D)$102 trillion.

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Definitions:

Market Price

Market Price is the current price at which a good or service can be bought or sold in a marketplace.

Short Run

This is a period during which at least one factor of production is fixed, typically used in economic analyses to describe immediate effects of changes.

Produce

Agricultural products, especially fresh fruits and vegetables, that are grown for consumption.

Price

The fund requirements to procure a product or service.