Author Question: Scarcity affects only those who are in need. Indicate whether the statement is true or ... (Read 130 times)

2125004343 · **on:** Jun 29, 2018

Scarcity affects only those who are in need.

Indicate whether the statement is true or false

Question 2

What is potential GDP and what is the relationship between actual and potential real GDP?

What will be an ideal response?

firehawk60 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

FALSE

Answer to Question 2

The quantity of GDP at full employment is called potential GDP. Over the business cycle, real GDP fluctuates around potential GDP. When the unemployment rate is higher than the natural rate, real GDP is less than potential GDP and when the unemployment rate is lower than the natural rate, real GDP exceeds potential GDP.