If Potential Output for an Economy Equals $8 Billion, and Actual

question 54

Multiple Choice

If potential output for an economy equals $8 billion, and actual output equals $7 billion, then this economy has a(n) :

• A)budget deficit.
• B)trade deficit.
• C)expansionary gap.
• D)recessionary gap.

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Definitions:

Adaptability

The ability of an individual or organization to adjust or change in response to new circumstances.

Profitability

The state or condition of yielding a financial gain or return on investment.

Survival

The ability of an organism, entity, or business to continue to live or exist, especially under difficult or threatening conditions.

Quality Problems

Issues arising from products or services not meeting the established standards of excellence, leading to dissatisfaction or functional failures.