The Difference Between the Economy's Potential Output and Its Actual

question 46

Multiple Choice

The difference between the economy's potential output and its actual output relative to its potential output at a point in time is called the:

• A)budget deficit.
• B)trade deficit.
• C)output gap.
• D)full-employment rate.

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Definitions:

Validity

The degree to which a test, tool, or study accurately measures or reflects what it is intended to measure.

Applicability

The relevance or suitability of something for a particular purpose or in a specific context.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Independent Variable

In an experiment, it is the variable that is manipulated or changed to observe its effect on the dependent variable.