Production Functions Used in Economic Growth Theory Are Always Limited

question 83

True/False

Production functions used in economic growth theory are always limited to two inputs: labor and capital.

---

Definitions:

Full Employment GDP

The output level of goods and services in an economy when all available labor resources are being used in the most economically efficient way.

Equilibrium GDP

The gross domestic product level where aggregate supply equals aggregate demand, indicating a stable economy.

Inflationary Gap

A situation where aggregate demand in an economy exceeds aggregate supply, leading to inflation and a higher levels of spending than what is supported by production.

Federal Budget Deficit

The shortfall that occurs when the United States federal government's expenditures exceed its revenues within a fiscal year.