If Actual Output Is $11

question 31

Multiple Choice

If actual output is $11.7 trillion and potential output is $12.8 trillion, then the output gap is approximately

• A)+9.4 percent.
• B)+8.6 percent.
• C)−8.6 percent.
• D)−9.4 percent.

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Definitions:

Isocost Line

A graph line representing all combinations of a firm's inputs that cost the same total amount.

Expenditures

The financial outflows or payments made by an individual, organization, or government unit, usually for goods or services.

Average Product

The output per unit of input, calculated by dividing total output by the quantity of inputs used.

Production Possibilities

Different combinations of goods and services that an economy can produce efficiently with its available resources and technology.