QUESTION 4 Why is GDP sometimes higher than potential GDP and other times lower than potential GDP? O Because GDP is affected by the business cycle in the short run and potential GDP is not O Because the amount of capital (K) and labor (L) available in the macroeconomy changes slowly over time O Unlike the microeconomic production possibilities frontier (PPF), actual output (GDP) in the short run can be produced in the region beyond the macroeconomic PPF (which is infeasible for individual firms and markets) O All of the above

QUESTION 4 Why is GDP sometimes higher than potential GDP and other times lower than potential GDP? O Because GDP is affected by the business cycle in the short run and potential GDP is not O Because the amount of capital (K) and labor (L) available in the macroeconomy changes slowly over time O Unlike the microeconomic production possibilities frontier (PPF), actual output (GDP) in the short run can be produced in the region beyond the macroeconomic PPF (which is infeasible for individual firms and markets) O All of the above

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter19: Measuring Economic Performance

Section: Chapter Questions

Problem 11P

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