In Macroland, Potential Output Equals $100 Trillion and the Natural

question 41

Multiple Choice

In Macroland, potential output equals $100 trillion and the natural rate of unemployment is 4 percent. If the actual unemployment rate is 3 percent, then the output gap equals:

• A)−1 percent.
• B)−2 percent.
• C)1 percent.
• D)2 percent.

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Definitions:

Credit Terms

Credit Terms are the payment terms and conditions established by a seller, including the period that has to pass before an invoice is considered overdue.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.

Ending Inventory

The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold at the end of an accounting period.