What Is the Level of Real GDP Called in the Long-Run

question 38

Multiple Choice

What is the level of real GDP called in the long-run?

• A)frictional GDP
• B)short-run GDP
• C)potential GDP
• D)low capacity GDP

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Definitions:

Private Cost

The costs directly incurred by individuals or companies involved in conducting an economic activity, excluding any external effects on others.

External Cost

A cost of a transaction that affects someone who did not choose to incur that cost, often associated with negative side effects of economic activities not reflected in market prices.

Social-Cost Curve

A graphical representation showing the total cost to society of producing various levels of a particular good or service, including both private costs and external costs.

Demand Curve

A graphical representation in economics showing the relationship between the price of a specific good and the amount of it that consumers are willing and able to purchase at various prices.