Which of the following is true about potential GDP? Select one For a nation to b

Question

Which of the following is true about potential GDP? Select one For a nation to be at its potential GDP the unemployment rate has to be zero If the current unemployment rate is below the natural unemployment rate, then when current GDP is greater than potential GDP, then current unemployment will be below the natural unemployment rate Which of the following best describes a recession? Select one: when the economy experiences deflation Any time the unemployment rate increase above 8% A widespread contraction in economic activity visible in many variables including real GDP real income and employment A situation where the level of real GDP growth is slower than normal The difference between nominal and real variables is that select one Real variables include opportunity cost Real variables are measured after taxes have been deducted Nominal variables do not account for changes in business cycle. Which of the following bank related actions would increase the supply of money (as defined by M1) i.e create money? Select one people taking money out of their checking accounts banks making loans banks accepting savings deposits

Explanation / Answer

6. C. when the current GDP is greater than the potential GDP, Unempolnment

7. C. A widespread contraction in the economic ACTITIVITIES

8. D. Real variables have been adjusted for Inflation..

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