Potential GDP Is the Level of

question 263

Multiple Choice

Potential GDP is the level of

• A)GDP that is impossible to achieve.
• B)real GDP that the economy could produce at full employment.
• C)nominal GDP that is smaller than the real GDP.
• D)GDP that fluctuates around actual GDP.
• E)GDP that would be produced if all workers were fully employed and there was no unemployment.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing to pursue a particular action.

Incentive

An incentive is a motivational factor or reward that encourages people to perform an action or adopt a behavior.

Room And Board

A combination of housing (room) and meals (board) typically provided as part of compensation or in a collegiate setting.

Scarce Resources

Natural, human, and man-made inputs that have limited availability and are used for the production of goods and services.