In Any Year, Real GDP

question 383

Multiple Choice

In any year, real GDP

• A) must always be less than potential GDP.
• B) might be greater or less than potential GDP.
• C) will be greater than potential GDP if the inflation rate is positive.
• D) always equals potential GDP.

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Definitions:

Tariff

A Tariff is a tax imposed by a government on imported goods, often used to protect domestic industries from foreign competition.

Opportunity Cost

Giving up the chance to benefit from other opportunities by selecting a specific option.

Dalers

A currency that was used in the past in various countries and territories, including Denmark and the United States.

Comparative Advantage

The capability of a nation or business to manufacture a specific product or offer a service at a lesser opportunity cost compared to its rivals.