The Level of Real GDP in the Long Run Is

question 74

Multiple Choice

The level of real GDP in the long run is called

• A)potential GDP.
• B)short-run GDP.
• C)frictional GDP.
• D)low-capacity GDP.
• E)zero unemployment GDP.

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Definitions:

Laffer Curve

An economic theory suggesting there exists an optimal tax rate that maximizes government revenue without discouraging people from working or investing.

Tax Rate

The percentage at which an individual or corporation is taxed.

Tax Receipts

The revenue collected by the government through all forms of taxes, such as income tax, corporate tax, and sales tax.

Fiscal and Monetary Policies

Government strategies used to influence economic conditions, with fiscal policy involving taxation and spending decisions and monetary policy concerning the control of the money supply and interest rates.