Which of the Following About Potential GDP Is True

question 91

Multiple Choice

Which of the following about potential GDP is true?

• A) During a recession, actual GDP will exceed potential GDP.
• B) Actual GDP cannot exceed potential GDP, even for short periods.
• C) Actual output may be either above or below potential output depending on how fully resources are utilized.
• D) The economy's potential output is the maximum output that could be achieved temporarily during a time of economic boom.

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the owners' claim on the company.

Unissued Stock

Shares that have been authorized by a company's charter but have not been issued or sold to investors.

Shares

Units of ownership interest in a corporation or financial asset, representing an equal proportion of the company's capital.

Book Value

The net value of a company's assets as recorded on its balance sheet, calculated as total assets minus intangible assets and liabilities.