If the Economy Is at Macroeconomic Equilibrium, Then Real GDP

question 45

Multiple Choice

If the economy is at macroeconomic equilibrium, then real GDP

• A) might be equal to, greater than or less than potential GDP
• B) must be greater than potential GDP.
• C) must equal potential GDP.
• D) must be less than potential GDP.
• E) cannot be compared to potential GDP.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment gives the investor significant influence over the investee, typically reflected as a percentage of the investee's net income or loss on the investor's balance sheet.

Consolidated Financial Statements

Financial statements that aggregate the financial position and operating results of a parent company and its subsidiaries, presenting the group as a single economic entity.

Common Shares

Equity securities that represent ownership interest in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, often referred to as the bottom line.