In the Short Run, the Equilibrium Level of Real GDP

question 210

Multiple Choice

In the short run, the equilibrium level of real GDP

• A) is necessarily less than potential GDP.
• B) is necessarily equal to potential GDP.
• C) is necessarily greater than potential GDP.
• D) could be less than, equal to, or greater than potential GDP.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Short-Term Note Payable

A debt obligation due within one year or within the normal operating cycle of the business, used to finance short-term financing needs.

Receivables Turnover Ratio

A financial metric used to assess how efficiently a company collects cash from its credit sales by dividing total credit sales by the average accounts receivable.

Payments Quickly

Payments quickly refers to the process of settling financial transactions or obligations in a brief period of time, enhancing liquidity and cash flow management.