If Potential Output for an Economy Equals $5 Billion, and Actual

question 50

Multiple Choice

If potential output for an economy equals $5 billion, and actual output equals $4.5 billion, then this economy has a(n) :

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

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Definitions:

Wagner Act

Officially known as the National Labor Relations Act of 1935, it is a foundational statute of United States labor law which guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action including strikes.

FTC Act

A federal law established to prevent unfair methods of competition, and unfair or deceptive acts affecting commerce.

Celler-Kefauver Act

The federal law of 1950 that amended the Clayton Act by prohibiting the acquisition of the assets of one firm by another firm when the effect would be less competition.

Federal Trade Commission

A U.S. government agency whose mission is to protect consumers and promote competition.