Actual GDP Will Fall Short of Potential GDP in the Short

question 38

Multiple Choice

Actual GDP will fall short of potential GDP in the short run if

• A) the aggregate supply schedule falls short of actual GDP at the full employment level.
• B) existing prices correspond to a level of aggregate demand in excess of potential GDP.
• C) existing prices correspond to a level of aggregate demand below potential GDP.
• D) the existing capital stock produces aggregate demand that is smaller than the corresponding aggregate supply.
• E) none of the above.

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Definitions:

Pyrotechnics

The art of making or displaying fireworks; also used metaphorically to describe impressive displays or performances.

Fireworks

Pyrotechnic devices used for entertainment purposes, which explode to produce colorful lights and sounds.

Pyrotechnics

The art of making or displaying fireworks, often used in celebrations or as special effects in entertainment.

Firecrackers

Small explosive devices primarily designed to produce a large sound and a display of light, used for entertainment, especially during celebrations.