Figure 12-2 -Refer to Figure 12-2.Suppose That the Level of GDP Associated

question 208

Multiple Choice

Figure 12-2
-Refer to Figure 12-2.Suppose that the level of GDP associated with point N is potential GDP.If the U.S.economy is currently at point K,then

• A)firms are operating above capacity.
• B)the economy is at full employment.
• C)the economy is in recession.
• D)the level of unemployment is equal to the natural rate.

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Definitions:

Amortization Period

The length of time it takes to pay off a loan or mortgage in full with regular payments that cover both principal and interest.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, so the balance doesn't merely grow; it grows at an increasing rate.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Loan

Money that is borrowed, typically from a bank or financial institution, that is expected to be paid back with interest.