Potential Output Is

question 11

Multiple Choice

Potential output is:

• A) the same as actual output.
• B) the same as the output gap.
• C) the same as the natural rate of unemployment.
• D) the maximum sustainable amount of output.

Understand the concept of production possibility frontier and its implications for opportunity cost and economic efficiency.

Comprehend the idea of opportunity cost in various trade-offs and its calculation in different scenarios.

Grasp the concept of autarky, its definitions, and implications for a country's economy.

Identify and differentiate between goods and services traded internationally.

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Definitions:

Adjustments

Entries made in accounting to record expenses or revenues in the period they occur rather than when cash is paid or received, ensuring accuracy in financial statements.