When an Economy Is Not Producing at Its Potential Output

question 48

Multiple Choice

When an economy is not producing at its potential output, which of the following is likely?

• A) The actual price level is unexpected.
• B) The nominal wage is equal to the real wage.
• C) The unemployment rate is about 14 percent.
• D) The economy is producing its maximum sustainable output.
• E) The economy is producing its minimum sustainable output.

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Definitions:

Latent Injury

An injury that is not immediately apparent and may become manifest only after some time has passed.

Legal Claim

A right to seek a legal remedy or defense as a result of the violation of one's rights by another party.

Slip-And-Fall

Refers to personal injury claims arising when an individual slips, trips, or falls as a result of a dangerous or neglected condition on someone else's property.

Illusory Promise

A statement that appears to be a promise but does not actually commit the person making it to any action or performance.