If Equilibrium GDP Exceeds Full-Employment GDP

question 121

Multiple Choice

If equilibrium GDP exceeds full-employment GDP,

• A)The difference is the recessionary GDP gap.
• B)The difference is the inflationary GDP gap.
• C)Inventories will accumulate.
• D)Leakages must be greater than injections.

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Definitions:

Amortization

The gradual reduction of a debt over a period of time through regular payments or the systematic allocation of intangible asset costs over its useful life.

Unrealized Gain

A profit that results from holding onto an asset rather than selling it, not reflected in cash flow or income until the asset is sold.

Positive Gross Profit

A financial state where a company's revenue from sales exceeds its cost of goods sold.

Transfer of Assets

The act of transferring ownership of assets from one party to another, which can include both tangible and intangible assets.