When an Economy Operates at Its Long-Run Potential Output Level

question 166

Multiple Choice

When an economy operates at its long-run potential output level,

• A) aggregate demand will exceed aggregate supply in the goods and services market.
• B) unemployment will decline to an abnormally low rate that cannot be sustained in the long run.
• C) the actual rate of unemployment will exceed the natural rate of unemployment.
• D) the natural and actual rates of unemployment will be equal.

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Definitions:

Standard Costing

A management accounting method that uses standard costs for direct materials, labor, and overhead to control expenses and assess performance.

Organisational Performance

Organisational Performance refers to how well an organization achieves its predetermined objectives, encompassing efficiency, effectiveness, and financial performance.

Performance Appraisal

A systematic evaluation of an employee's job performance and productivity in relation to pre-established criteria and objectives.

Direct Material Standards

Established benchmarks for the cost and quantity of materials required for production processes.