When the Growth Rates of Actual and Potential GDP Diverge

question 181

Multiple Choice

When the growth rates of actual and potential GDP diverge, they usually diverge because

• A)actual GDP growth equals potential GDP growth.
• B)actual GDP growth falls below potential GDP growth.
• C)potential GDP growth rates fall below actual GDP growth rates.
• D)potential GDP growth rates fluctuate while actual GDP growth rates remain stable.

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Definitions:

Costs and Expenses Forecast

An estimate of future costs and expenses that a business expects to incur over a specific period, often used for budgeting and financial planning purposes.

Additional Shifts

Extra work periods added to a company's regular schedule to increase production or cover demand.

Financial Plan

A comprehensive evaluation of an individual's or organization's current pay and future financial state by using current known variables to predict future income, asset values, and withdrawal plans.

Forecast of Sales

An estimate of the future sales volume over a specific period, based on historical data, market analysis, and other factors.