If an Economy Is at Its Potential Output Level, Which

question 155

Multiple Choice

If an economy is at its potential output level, which of the following is not true?

• A) The economy is at its full-employment output level.
• B) Unemployment is at the natural level.
• C) The price level is zero.
• D) The output level being produced can be sustained indefinitely given the economy's resources and technology.
• E) The only unemployment is frictional or structural.

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Definitions:

Declarative Knowledge

Knowledge of information that can be expressed in words.

Retrograde Amnesia

A memory deficit, often suffered after a head injury, in which the patient loses memory for events that occurred before the injury.

Anterograde Amnesia

A condition where an individual is unable to form new memories following the onset of an amnesia-causing event, though long-term memories from before the event may remain intact.

Working Memory

A system for temporarily holding and manipulating information necessary for cognitive tasks such as learning, reasoning, and comprehension.