Potential GDP Is

question 79

Multiple Choice

Potential GDP is

• A) the same as real GDP.
• B) the same as nominal GDP.
• C) another name for the Lucas wedge.
• D) the level of output produced when the economy is fully employed.
• E) shows that the Okun gap vastly exceeds the Lucas wedge.

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Definitions:

T-Accounts

A graphical representation used in accounting to depict the debit and credit sides of an account for easy visualization and calculation.

Cost Of Goods Sold

The direct costs attributed to the production of the goods sold by a company, including the cost of the materials and labor directly involved.

Manufacturing Overhead

All production costs other than direct materials and direct labor that are incurred in the manufacturing process and need to be allocated to produced goods.

Manufacturing Overhead Applied

The portion of manufacturing overhead costs assigned to individual units of production, based on a predetermined rate or method.