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.

Grasp the role of government intervention in correcting market failures and externalities.

Understand the importance of property rights in a market economy.

Recognize the impact of government policies on market economies.

Explain the relationship between prices and economic activity.

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