Author Question: U.S. imports and exports both fell during the first quarter of 2009. The value of these imports and ... (Read 46 times)

xclash · **on:** Jun 29, 2018

U.S. imports and exports both fell during the first quarter of 2009. The value of these imports and exports would be reflected in the United States

A) capital account. B) current account.
C) exchange rate account. D) financial account.

Question 2

What is the relationship over the business cycle of potential GDP and real GDP?

What will be an ideal response?

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

Answer to Question 1

B

Answer to Question 2

The level of output that the economy would produce if it was at full employment is called potential GDP. However, the economy is not always at full employment. In a recession, employment is less than full employment and so real GDP is less than potential GDP. And, in an expansion, employment can exceed full employment so that real GDP exceeds potential GDP.