If Real GDP Is Less Than Potential GDP, Then the Economy

question 89

Multiple Choice

If real GDP is less than potential GDP, then the economy is

• A)not in short-run equilibrium.
• B)in a full-employment equilibrium.
• C)in an above full-employment equilibrium.
• D)in a below full-employment equilibrium.
• E)in long-run equilibrium.

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Definitions:

Lessor

The owner of an asset who leases it to another party, known as the lessee, under a lease agreement.

Lessee

An individual or entity that leases an asset from another, the lessor, under the terms of a lease agreement.

Lease Agreement

A contract between two parties where one, the lessor, provides an asset for use to the other, the lessee, for a specific period in exchange for periodic payments.

Financial Leases

Long-term leases that transfer substantially all the risks and rewards of ownership of the asset to the lessee, similar to finance purchases.