Which of the Following Statement or Statements Are Correct About

question 195

Multiple Choice

Which of the following statement or statements are correct about potential GDP?
I.Actual real GDP equals potential GDP when the economy is at full employment.
Ii.Real GDP can be less than potential GDP.
Iii.When real GDP equals potential GDP,it also equals nominal GDP.

• A)i only
• B)ii only
• C)ii and iii
• D)i and ii
• E)i,ii,and iii

---

Definitions:

National Income Accounting

A statistical approach that measures the overall economic activity and income of a country.

Economic Welfare

The overall well-being and standard of living of people in an economy, often measured by standards such as health, education, and income.

Negative Externalities

occur when the production or consumption of goods and services imposes costs on third parties not involved in the transaction.

Underground Economy

consists of unreported income from the production of legal goods and services, either due to tax avoidance or the desire to avoid government regulations.