The Situation in Which Actual Output Exceeds Potential Output

question 129

Multiple Choice

The situation in which actual output exceeds potential output

• A) is impossible because all resources are employed to produce potential output
• B) is possible only in times of high unemployment
• C) is possible only if the unemployment rate is negative
• D) is possible only in the long run
• E) creates pressure for inflation

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Definitions:

Marginal Utility

The heightened enjoyment or value gained from the consumption of one more unit of a good or service.

Health Cost

The expenses associated with healthcare services, including prevention, treatment, and rehabilitation.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in the per-unit cost of production as the size of the operation grows.

Product Variety

Refers to the assortment of different goods and services that a firm offers to its customers, highlighting the diversity within a product line.