Multiple Choice
Which of the following is a true statement about potential output?
A) The concept of potential output might be thought of as the maximum sustainable output of the economy under normal circumstances.
B) Actual output cannot exceed potential output, even during a boom.
C) When the actual rate of unemployment exceeds the natural rate, the actual output of the economy will rise above its potential.
D) Potential output represents the absolute maximum level of production.
Correct Answer:
Verified
Correct Answer:
Verified
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