Potential GDP Is Reached When

question 36

Multiple Choice

Potential GDP is reached when

• A) unemployment is zero.
• B) there is no cyclical unemployment.
• C) unemployment is above full employment.
• D) the natural unemployment rate equals zero.
• E) unemployment is below full employment.

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Definitions:

Joint Profits

The total earnings generated by two or more firms collaborating in a venture or partnership.

Marginal Cost

The uplift in total expenditure caused by the production of one more unit of a product or service.

Fixed Cost

Costs that do not change with the level of output produced, such as rent, salaries, and insurance.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in the market, often resulting in higher prices and restricted supply.