If We Cannot Accurately Measure Potential GDP

question 1

Multiple Choice

If we cannot accurately measure potential GDP:

• A) we might overestimate the severity of a recession
• B) we may adopt the wrong fiscal or monetary policy
• C) we will never know the true state of the economy
• D) All of these answers are correct.
• E) None of these answers are correct.

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Definitions:

Accord And Satisfaction

Accord and Satisfaction is a legal agreement between parties to settle a dispute by agreeing on a payment that is different from what was originally owed.

Unliquidated Debt

A debt for which the exact amount has not been determined.

Liquidated Debt

A debt for which the amount owed is known and undisputed.

Unliquidated Debt

A debt for which the amount has not been predetermined or agreed upon, often because the extent of damages or compensation cannot be readily quantified.