In Macroland, Potential Output Equals $100 Trillion and the Natural

question 94

Multiple Choice

In Macroland, potential output equals $100 trillion and the natural rate of unemployment is 4 percent. If the actual unemployment rate is 5 percent, then real GDP must be:

• A)$98 trillion.
• B)$96 trillion.
• C)$102 trillion.
• D)$104 trillion.

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Definitions:

Localized Markets

Markets that are confined to a specific geographical area, where the products or services cater primarily to the local population.

Import Competition

Import competition involves domestic companies facing competition from foreign-produced goods and services in the domestic market.

Four-firm Concentration Ratio

A metric that indicates the total market share owned by the four largest firms in an industry, used to assess the degree of market concentration and competition.

Market Shares

The share of a market that a specific company holds, typically represented by the percentage of total market sales it accounts for.