A Characteristic of Long-Run Equilibrium Is the Economy Is Producing

question 81

Multiple Choice

A characteristic of long-run equilibrium is the economy is producing its potential output. This is:

• A) the maximum level of output the economy could produce at any time.
• B) the level of output the economy produces when its resources are used at normal rates.
• C) defined as using 80 percent of the economy's resources at any time.
• D) the level of output consistent with an unemployment rate of 7.5%.

---

Definitions:

Market Potential

The estimated maximum total sales revenue of all suppliers for a specific product in a market.

GDP

Gross Domestic Product, a measure of a country's economic performance, representing the total value of all goods and services produced over a specific time period.

GNI

Gross National Income, a measure of a country's income, including domestic production and foreign investments, used to estimate the economic health of a nation.

Tariff

A tax levied on a good imported into a country; also called a duty.