The Situation in Which Actual Output Exceeds Potential Output

question 129

Multiple Choice

The situation in which actual output exceeds potential output

• A) is impossible because all resources are employed to produce potential output
• B) is possible only in times of high unemployment
• C) is possible only if the unemployment rate is negative
• D) is possible only in the long run
• E) creates pressure for inflation

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Definitions:

Underwood Tariff

A 1913 U.S. law that significantly lowered tariffs on imported goods for the first time since the Civil War and implemented an income tax following the ratification of the 16th Amendment.

Tariff Rates

Taxes imposed by a government on imported or exported goods.

Independent Commission

An autonomous body established to investigate, analyze, or oversee specific issues or areas, often governmental or industry-related, without bias.

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The 26th President of the United States, known for his progressive policies, leadership in the early 20th century, and role in mediating the end of the Russo-Japanese War.