Define Potential GDP

question 236

Essay

Define potential GDP.Under what circumstances does actual real GDP fall short of potential GDP,equal potential GDP,and exceed potential GDP?

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Definitions:

Temporal Method

An accounting method used to translate foreign currency balances when the exchange rate fluctuates significantly, converting monetary items at the exchange rate of the transaction date.

U.S. Dollars

The official currency of the United States, commonly used as a basis for financial transactions and accounting records.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material, labor, and manufacturing overhead expenses.

Historical Rate

A reference to the exchange rate used in the past for converting one currency to another at a specific time.