Producing an Amount of GDP Equal to Potential GDP Is

question 53

Multiple Choice

Producing an amount of GDP equal to potential GDP is most consistent with the economy producing

• A)on the production possibilities frontier.
• B)within the production possibilities frontier.
• C)beyond the production possibilities frontier.
• D)either on or within the production possibilities frontier.
• E)either on or beyond the production possibilities frontier.

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Definitions:

Willingness to Pay

The maximum amount a consumer is prepared to spend for a good or service.

Baseball Game Ticket

A document or electronic card that grants the bearer entry to a baseball game.

Consumer Surplus

The distinction between the full amount consumers are willing and able to spend on a good or service and the actual sum paid.

Price Floor

A government or group-imposed price control or limit on how low a price can be charged for a product, above the equilibrium price.