If Real GDP Is Increasing at a 2 Percent Annual

question 55

Multiple Choice

If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent,the economy is

• A) not achieving full economic potential
• B) experiencing an increase of 2 percent in real annual per capita GDP
• C) experiencing a slump
• D) experiencing high prices and low inflation
• E) producing along its production possibilities frontier

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Definitions:

Laissez-faire

An economic principle advocating minimal governmental interference in the free market and the economic affairs of individuals.

Bureaucratic Innovations

New methods, policies, or practices implemented within bureaucratic structures to improve efficiency, responsiveness, or outcomes in organizational or governmental operations.

Ethnicity

A category of people identified by common characteristics such as culture, language, or ancestral heritage.

Inequality

The unequal distribution of resources, opportunities, and rights among individuals or groups within a society.