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Author Question: Explain the relationship between real GDP and potential GDP during the two phases of the business ... (Read 82 times)

yoroshambo

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on: Jun 29, 2018
Explain the relationship between real GDP and potential GDP during the two phases of the business cycle.
 
  What will be an ideal response?

Question 2

The implicit rental rate for capital is
 
  A) an accounting cost.
  B) part of the firm's normal profit.
  C) an opportunity cost.
  D) a cost that is irrelevant to the business.


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Carliemb17

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Reply #1 on: Jun 29, 2018
Answer to Question 1

During an expansion the level of real GDP eventually surpasses potential GDP, reaches a peak and subsequently falls below potential GDP during a recession eventually reaching a trough.

Answer to Question 2

C


yoroshambo

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Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

cassie_ragen

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Reply 3 on: Yesterday
Excellent

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