Potential GDP Is an Estimate of the Economy's Ability to Produce

question 111

Multiple Choice

Potential GDP is an estimate of the economy's ability to produce goods and services if the

• A)labor force is fully employed.
• B)price level is stable.
• C)trade balance is zero.
• D)federal budget is balanced.

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Definitions:

M3

A measure of the money supply that includes M2 (cash, checking deposits, and easily convertible near money) plus large time deposits, institutional money market funds, and other larger liquid assets.

Small Denomination CDs

Certificates of Deposit that are available in lower monetary values, offering a way for individual investors to earn interest on their savings.

Paper Money

Currency in the form of banknotes issued by a government or central bank.

United States

A country located in North America, known for its significant impact on global politics, economy, and culture, being one of the world's largest and most powerful nations.