The Figure Below Shows the Relationship Between an Economy's Potential

question 53

Multiple Choice

The figure below shows the relationship between an economy's potential output,price level,and real GDP.According to those who favor an active approach to policy,the economy will end up at _____when it attains the potential output level.​ ​
Exhibit 16-1

• A)point A
• B)point B
• C)point C
• D)a point between A and B
• E)a point between A and C

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Definitions:

Net Capital Outflow

The difference between a country's total exports of capital and total imports of capital during a specific time period.

Net Exports

The value of a country's total exports minus the value of its total imports.

Mutual Fund

An institution that sells shares to the public and uses the proceeds to buy a portfolio of stocks and bonds.

Trade Deficit

A condition in which the value of a nation's imports surpasses the value of its exports, resulting in a trade deficit.