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

question 114

Multiple Choice

If potential output for an economy equals $8 billion and actual output equals $7 billion, then this economy's output gap should be expressed as:

• A)−$1 billion.
• B)$1 billion.
• C)12.5 percent.
• D)−12.5 percent.

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Definitions:

Commercial Reasonableness

Reasonable commercial standards of fair dealing, required of merchants in addition to honesty in fact.

Fair Dealing

A legal doctrine that allows for limited use of copyrighted material without permission from the copyright holder, typically for purposes of criticism, review, or education.

Uniform Commercial Code

An extensive collection of regulations that oversee every commercial activity in the United States, designed to unify laws throughout the states.

Impracticable

A situation or condition that is impossible to put into practice or achieve due to current circumstances or limitations.