Potential GDP

question 252

Multiple Choice

Potential GDP

• A)increases as the price level increases because firms supply more goods and services.
• B)decreases as the price level increases because people demand fewer goods and services.
• C)might either increase or decrease as the price level increases,depending on whether aggregate demand increases or decreases.
• D)is independent of the price level.
• E)never changes.

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Definitions:

Exponential Expression

A mathematical phrase where numbers or variables are raised to a power or exponent.

Associative Property

A mathematical rule stating that the way in which numbers are grouped in operations does not change their result.

Multiplication

A mathematical operation where a number is added to itself a certain number of times.

Decimal Places

The number of digits to the right of the decimal point in a number, determining its precision.