Potential Output for the Current Period Is Fixed at the Level

question 30

Multiple Choice

Potential output for the current period is fixed at the level Y* because the current period's

• A) labour force is fixed.
• B) labour force is fixed,capital stock is fixed,and natural resources are fixed.
• C) labour force and natural resources are fixed.
• D) capital stock is fixed,natural resources are fixed,and the productivity of the technology is fixed.
• E) labour force is fixed,capital stock is fixed,natural resources are fixed,and the productivity of the technology is fixed.

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Definitions:

Lump-Sum Taxes

Taxes that are a fixed amount, not varying with the income or wealth of the taxpayer, and are paid at one time instead of in installments.

Budget Deficit

A situation where a government's expenditures exceed its revenues during a specified period of time, leading to borrowing or debt accumulation.

Discretionary Fiscal Policy

Government policy involving the use of government spending and taxation levels to influence the economy, based on current conditions.

Entitlement Programs

Government programs that guarantee certain benefits to a particular group or segment of the population, such as Social Security or Medicare in the United States.