Potential Real GDP Is $10,000 and the Current Level of Real

question 253

Multiple Choice

Potential real GDP is $10,000 and the current level of real GDP is $9,000. The output gap is therefore _____%.

• A) -90
• B) -110
• C) -10
• D) 10

Understand the concept of marginal utility and how it affects the marginal rate of substitution between goods.

Recognize principles of Pareto optimality in the context of resource distribution.

Identify and calculate marginal rates of substitution in utility maximization problems.

Understand the conditions for and implications of Pareto efficiency in resource allocation.

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Definitions:

Internal Locus

An internal locus of control refers to the belief that individuals can influence events and their outcomes, relying on their own efforts and actions.

Emotion-focused Coping

A stress management strategy that involves reducing stress by minimizing, avoiding, or accepting the emotional response to a problem, rather than addressing the problem directly.

Electric Shocks

Sudden discharges of electricity through a part of the body, often used for therapeutic purposes or as a punishment.

Appetizing Food

Food that looks, smells, and tastes appealing, often stimulating a person's desire to eat.