Suppose the Economy Is Producing Beyond Its Potential Output Level

question 7

Multiple Choice

Suppose the economy is producing beyond its potential output level.Which of the following best describes the state of the economy?  

• A) The economy is producing beyond the natural rate of unemployment. 
• B) The economy is producing at its maximum capacity. 
• C) The economy is producing less than its productive capacity. 
• D) The economy is producing at less than its natural rate of unemployment.