If Actual Output Equals Potential Output, but Potential Is Growing

question 34

Multiple Choice

If actual output equals potential output, but potential is growing unusually slowly, then an economy:

• A) is in a recession.
• B) is in an expansion.
• C) has an output gap.
• D) has a recessionary gap.

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Definitions:

Industrial Countries

Nations with highly developed economies, characterized by significant industrial activity, advanced technological infrastructure, and higher standards of living.

Percentage

A proportion or part in relation to a whole, represented as a fraction of 100.

Water-Soluble Material

A substance that can dissolve in water, making it capable of being washed away or diluted in aqueous solutions.

Invention

The creation of a new product, process, or idea.