When an Economy Is Producing at Its Potential Level of Output

question 40

Multiple Choice

When an economy is producing at its potential level of output:

• A)cyclical unemployment is not occurring.
• B)structural unemployment is not occurring.
• C)frictional unemployment is not occurring.
• D)No unemployment may occur when the economy is at its potential output.

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Definitions:

Nonoccurrence

The failure or absence of an event or condition that was anticipated or required.

Event

A specific occurrence or happening, often of significance, that takes place at a particular time.

Agreement

A mutual understanding or arrangement between two or more parties outlining terms and conditions for a specific purpose.

Payee

The party in a financial transaction who receives payment.