Potential GDP Is

question 108

Multiple Choice

Potential GDP is

• A)equal to the maximum amount of goods and services that can be produced at any given time.
• B)another name for real GDP.
• C)the level of output produced when the economy is fully employed.
• D)a measure of the short term fluctuations in real GDP.
• E)another name for nominal GDP.

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Definitions:

Transfer Price

The price at which goods or services are sold between divisions within the same company.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor.

Transfer Price

The price at which goods and services are traded between departments or subsidiaries within the same organization.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor, in contrast to fixed costs which remain constant regardless of production level.