When the Economy Is Creating Less Output Than Its Potential

question 160

Multiple Choice

When the economy is creating less output than its potential, it means:

• A) there are some resources that are unemployed.
• B) the economy is in an economic boom.
• C) contractionary policy needs to be enacted.
• D) governments are likely to reduce their spending.

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Definitions:

Grow

To increase in size, number, or importance over a period of time.

Inherited

Received or passed down by inheritance, referring to assets, traditions, genetic traits, or conditions transferred from one generation to the next.

Monthly

Occurring or done once every month.

Prize

A reward given for a specific achievement or win in a competition.