If Real GDP Is Less Than Potential GDP, Then

question 93

Multiple Choice

If real GDP is less than potential GDP, then:

• A) the actual unemployment rate is greater than the natural unemployment rate.
• B) the actual unemployment rate equals zero.
• C) the output gap is positive.
• D) the actual unemployment rate is less than the natural unemployment rate.

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Definitions:

Labor

The application of human strength and intellect in the fabrication of products and provisions.

Machines

Often represents capital goods in economics, essential for the production process in industries and affecting both the output capacity and efficiency of operations.

Short-Run Total Cost

The sum of all expenses, including both constant and flexible, associated with the production of goods or services over a short period.

Production Function

A mathematical model depicting the relationship between input factors and the output of goods or services.