The Economy's Capacity to Produce Is Defined in Such a Way

question 13

Multiple Choice

The economy's capacity to produce is defined in such a way that

• A) output cannot exceed capacity
• B) the growth of potential GDP corresponds to the economy's long run trend
• C) the economy is always operating at its current potential
• D) there is always a degree of slack or inefficiency in production, so output is always below capacity
• E) when workers work overtime, capacity expands