In 2012,real GDP in the United States Was Below Potential

question 58

Multiple Choice

In 2012,real GDP in the United States was below potential GDP.This fact definitely means that

• A)the unemployment rate was near 10 percent.
• B)the unemployment rate was above the natural unemployment rate.
• C)the economy was in an expansion.
• D)cyclical unemployment had been decreasing.
• E)frictional unemployment was negative.

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Definitions:

Useful Life

The estimated duration an asset is expected to be functional and useful before it needs to be replaced or becomes obsolete.

Operating Cost

Expenses associated with the day-to-day functions of a business excluding cost of goods sold, such as rent, utilities, and payroll.

Value-Based Pricing

A pricing strategy where the price of a product or service is determined based on the perceived value to the customer rather than the cost of production.

Required Return

The minimum expected return by investors for investing in a particular security or project, reflecting the risk level.