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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