Which of the Following Statements Is True

question 75

Multiple Choice

Which of the following statements is true?

• A)Real GDP fluctuates around potential GDP.
• B)Potential GDP fluctuates around real GDP.
• C)Real GDP is something like an average of GDP.
• D)The growth rate of potential GDP is well known and generally agreed upon.
• E)Real GDP cannot be any greater than potential GDP.

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Definitions:

Endowment

An investment fund established by a foundation that makes consistent withdrawals from invested capital, often used by universities, nonprofits, and churches.

World Market

An international marketplace where goods, services, currencies, and other commodities are exchanged across borders.

Budget Line

A graphical depiction of all possible combinations of two goods that can be purchased with a given income and prices, reflecting the trade-offs and choices available.

Utility Function

A mathematical representation that describes how a consumer ranks different bundles of goods according to the level of satisfaction obtained from them.