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What Does the Potential Output of an Economy Represent

Question 32

Multiple Choice

What does the potential output of an economy represent?  


A)  the level of output produced when the real wage equals the nominal wage 
B)  the level of output produced when the price level is constant 
C)  the level of output produced when the expected price level equals the unemployment rate 
D)  the level of output produced when the expected price level equals the actual price level

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