The Amount by Which Actual GDP Falls Short of Potential

question 5

Multiple Choice

The amount by which actual GDP falls short of potential GDP is one measure of the:

• A) Natural rate of unemployment
• B) Macroeconomic cost of unemployment
• C) Difference between real and nominal GDP
• D) Potential to produce outside the nation's PPC

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Definitions:

Marginal Revenue

The additional income earned from selling one more unit of a product or service.

Marginal Revenue

The additional income gained from selling one more unit of a good or service.

Average Revenue

The total revenue received by a firm from selling its products divided by the total quantity of the product sold, essentially the average price per unit sold.

Indistinguishable

Unable to be identified as different or distinct when compared to another.