When an Economy Is Operating at Its Full Employment Rate

question 93

Multiple Choice

When an economy is operating at its full employment rate of output,

• A)the rate of unemployment will be zero.
• B)output will exceed the economy's maximum sustainable rate.
• C)the actual rate of unemployment will equal the natural rate.
• D)the economy's potential rate of output will exceed actual GDP.

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Definitions:

Investment Capital

Funds invested in a project, company, or any asset with the expectation of generating a future return.

Export Promotion Policies

Government initiatives aimed at encouraging firms to export more of their goods and services, enhancing a country's trade balance.

Comparative Advantage

The ability of an entity to produce a good at a lower opportunity cost than another entity, promoting trade benefits.

Natural Experiments

Observational study situations where external circumstances or events have created conditions that mimic a controlled experiment.