Potential Output Is the

question 110

Multiple Choice

Potential output is the

• A) same as actual output.
• B) same as the output gap.
• C) same as the natural rate of unemployment.
• D) amount of output produced when resources are used at normal rates.
• E) amount of output produced when there is an expansionary gap.

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Definitions:

Units of X

A term commonly used in economics and other disciplines to denote a quantity or amount of a particular good or service referred to as "X."

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods such that the higher the function's value, the higher the level of satisfaction.

Price Increase

A situation where the cost of goods or services rises over a period.

Loss of Income

A reduction or complete stoppage of earnings that an individual or entity faces due to various factors like unemployment, disability, or business interruption.