Suppose an Economy Is Operating at Its Maximum Sustainable Output

question 67

Multiple Choice

Suppose an economy is operating at its maximum sustainable output rate. Neither recession nor economic boom are present. Which of the following would be true?

• A) The economy would be considered at full employment.
• B) Actual GDP would exceed potential GDP.
• C) Actual unemployment will be less than the natural rate of unemployment.
• D) One hundred percent of the labor force is employed.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

Market Value

The present rate at which a service or asset is available for purchase or sale on the open market.

Straight Line

A depreciation method where an asset loses value evenly across its useful life.

Tax Rate

The percentage at which an individual or corporation is taxed.