The Amount by Which Actual GDP Falls Short of Potential

question 36

Multiple Choice

The amount by which actual GDP falls short of potential GDP is one measure of the

• A) natural rate of unemployment.
• B) macroeconomic cost of unemployment.
• C) difference between real and nominal GDP.
• D) potential to produce outside the nation's PPC.

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Definitions:

Total Revenue

The total amount of money received by a company from sales of goods or services before any expenses are subtracted.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Tea Sales

This refers to the commercial activity of buying and selling tea in various forms and quantities.

Perfectly Price Inelastic

A situation in demand where the quantity demanded does not change regardless of changes in the price of a product or service.