Figure 23-2 -Refer to Figure 23-2.Suppose That the Level of GDP Associated

question 246

Multiple Choice

Figure 23-2
-Refer to Figure 23-2.Suppose that the level of GDP associated with point K is potential GDP.If the U.S.economy is currently at point N,

• A)firms are operating below capacity.
• B)the economy is at full employment.
• C)the economy is in an expansion.
• D)the level of unemployment is above the natural rate.

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Definitions:

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.

Raw Materials

The basic substances or components that are processed or combined to manufacture finished goods.

Work in Process

Inventory that includes all items that are currently being manufactured but are not yet completed products.

Inventory Transportation

The process and cost involved in moving inventory from one location to another, usually from warehouses to retailers or customers.