An Economy's Potential GDP Is fiXed; It Cannot Be Changed

question 42

True/False

An economy's potential GDP is fixed; it cannot be changed.

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Definitions:

Economic Recovery

The period of growth and improvement in economic indicators such as GDP, employment, and consumer spending following a recession.

Capital Projects

Large-scale investment projects that are undertaken by organizations or governments, which usually have a long-term impact on the economy.

Functional Finance

Functional finance is a theoretical approach to fiscal policy which holds that government budgets should be primarily evaluated on their effects on the economy rather than on principles of borrowing and debt.

Federal Budget

The annual financial statement presenting the government's proposed revenues and spending for a financial year.