Potential GDP Is the Maximum Amount of Economic Output an Economy

question 36

Multiple Choice

Potential GDP is the maximum amount of economic output an economy can sustain at any moment without

• A) causing frictional unemployment.
• B) raising unemployment levels.
• C) decreasing the inflation rate.
• D) increasing the inflation rate.

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Definitions:

American Dollars

The recognized monetary unit of the United States, commonly utilized as a standard and reserve money across the globe.

Outsourcing

The practice of hiring third parties to perform services or create goods that were traditionally done in-house, to reduce costs and improve efficiency.

Exchange Rate Risk

Exchange rate risk is the potential for investors to experience losses due to changes in the exchange rate between two currencies.

International Commerce

The exchange of goods, services, and capital across international borders or territories.