Potential GDP Is Reached When

question 114

Multiple Choice

Potential GDP is reached when

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

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Definitions:

Equilibrium

A state in a market or economy where supply equals demand, resulting in price stability and no net change in economic quantities.

ATC Curve

A graphical representation of the Average Total Cost, depicting how average cost of production varies with the quantity of output produced.

Efficient

Describes a process or system that achieves maximum productivity with minimum wasted effort or expense.

Economy

The system of production, distribution, and consumption of goods and services within a particular geographical area.