If Real GDP Is $200 Billion and the Inflationary Gap

question 198

True/False

If real GDP is $200 billion and the inflationary gap is $50 billion, potential GDP is $150 billion.

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Definitions:

Net Cash

The amount of cash that remains after accounting for all cash inflows and outflows during a specified period.

Operating Activities

Activities that are directly related to the primary business operations, such as selling products or services and associated costs.

Net Income

The overall income a business makes once all costs, such as taxes and operational expenditures, are deducted from the total earnings.

Net Cash

This refers to the amount of cash remaining after all cash outflows are subtracted from all cash inflows over a given period.