Select the Correct Prefix for the Following Meanings

question 137

Multiple Choice

Select the correct prefix for the following meanings.
-New:

• A) macro-
• B) para-
• C) neo-

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Definitions:

Potential GDP

The highest level of Gross Domestic Product (GDP) an economy can sustain over a long period without increasing inflation, reflecting its full employment output.

Inflation

A widespread rise in prices and a decrease in the value of money.

Spending Multiplier

A concept in Keynesian economics that quantifies the effect of an increase in autonomous spending on the total economic output.

Potential Output

The highest level of economic output that can be sustained over the long term without increasing inflation.