The Cyclical Part of Real GDP Is

question 16

Multiple Choice

The cyclical part of real GDP is

• A)trend real GDP less real GDP.
• B)real GDP less trend real GDP.
• C)real GDP/trend real GDP.
• D)trend real GDP/real GDP.

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Definitions:

Zero Economic Profits

Occurs when a firm earns just enough revenue to cover its total costs, including opportunity costs, but no more.

Efficiently

Performing or functioning in the best possible manner with the least waste of time and effort.

Economies of Scale

The cost advantage achieved by businesses when production becomes efficient, as the scale of operation increases leading to a reduction in average costs.

Positive Economic Profits

Earnings that exceed the total costs, including both the explicit and implicit costs of a business.