Potential GDP Is Reached When

question 114

Multiple Choice

Potential GDP is reached when

• A)unemployment is zero.
• B)there is no cyclical unemployment.
• C)unemployment is above full employment.
• D)unemployment is below full employment.
• E)the natural unemployment rate equals zero.

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Definitions:

Leisure

The time individuals spend away from work or essential activities, dedicated to relaxation, recreation, or hobbies.

Wage Rate

The amount of money paid to a worker per unit of time (hour, day, etc.), which can vary based on skill, occupation, and market conditions.

Lump Sum Payment

A single payment made at a particular time, as opposed to multiple payments made over time.

Budget Line

An illustrative chart showing every possible pair of two items that a specific budget and set prices allow to be acquired.