The Idea That Potential GDP Is the Sustainable Upper Limit

question 60

Multiple Choice

The idea that potential GDP is the sustainable upper limit of production means that

• A)real GDP may be temporarily larger than potential GDP,but not permanently.
• B)the economy is operating environmentally efficiently.
• C)real GDP may be temporarily less than potential GDP.
• D)inflation must always occur in a growing economy.
• E)unemployment can only temporarily be zero in a healthy economy.

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Definitions:

Liable

Legally responsible or obligated to compensate for harm or damages caused.

Garage

A building or indoor area designed for the storage and maintenance of vehicles.

Common Carrier

A business or agency that is available to the public for transportation of people, goods, or messages, under certain legal obligations.

Possession

The state of having, owning, or controlling something, typically physical.