Potential GDP Is Estimated to Grow at a Rate of 3.2

question 11

Multiple Choice

Potential GDP is estimated to grow at a rate of 3.2% in the United States.Actual GDP in the U.S.

• A)always grows at a slower rate than potential GDP.
• B)always grows at a faster rate than potential GDP.
• C)always grows at the same rate as potential GDP.
• D)is the same as potential GDP if all firms in the economy were working at capacity.

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Definitions:

Import Quota

A government-imposed limit on the quantity of a certain good that can be imported into a country over a specified period of time.

World Price

The international market price of a good or service, determined by global supply and demand conditions.

Net Welfare Loss

The loss of social welfare, typically due to inefficient market conditions or government interventions.

Specific Tariff

A fixed fee imposed by a government on imported or exported goods, which is based on the quantity of the item rather than its value.