Which of the Following Statements About Potential GDP Is False

question 72

Multiple Choice

Which of the following statements about potential GDP is false?

• A)The Fed's goal is to have equilibrium GDP close to potential GDP.
• B)When GDP is at potential, cyclical unemployment is zero.
• C)It occurs when firms are producing at their maximum level of output.
• D)It occurs when firms are producing with a workforce of normal size working normal hours.

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Definitions:

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow, which illustrates a five-tier model of human needs, depicted as hierarchical levels within a pyramid.

Acceptance

The action of consenting to receive or undertaking something offered.

Two-Factor Theory

A psychological theory suggesting that human behavior is influenced by two separate factors: motivation (intrinsic) factors, which drive satisfaction, and hygiene (extrinsic) factors, which can prevent dissatisfaction.

Hygiene

Practices and conditions that help maintain health and prevent the spread of diseases, typically involving cleanliness.