A Country Reports That Its Actual Real GDP Is Greater

question 255

Multiple Choice

A country reports that its actual real GDP is greater than its potential GDP.It must be that

• A)an error was made when calculating actual real GDP.
• B)the price level is increasing.
• C)more workers decided to quit work in order to enjoy leisure time.
• D)the excess by which real GDP exceeds potential GDP is only temporary,and eventually real GDP will decrease to be equal to potential GDP.
• E)None of the above answers is correct because it is impossible for a country's real GDP to exceed its potential GDP.

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Definitions:

MRP

Stands for Material Requirements Planning, a system for calculating the materials and components needed to manufacture a product.

Wage Rate

The amount of money paid to workers for their services, usually expressed per hour or per unit of work done.

Competitive Employer

A firm that operates in a competitive labor market, setting wages based on supply and demand rather than having the power to influence market conditions.

Wage Rate

The amount of money paid to an employee per unit of time or per task performed, often expressed as an hourly or piece rate.