TYP: SA
Exhibit 14A-3 Macro AD-AS Model

-In Exhibit 14A-3,the level of real GDP represented by Yp:
A) is potential real GDP for this economy.
B) indicates that the economy is experiencing zero inflation.
C) indicates that the economy is experiencing a recessionary gap.
D) would be associated with considerable unemployment.

Question

TYP: SA
Exhibit 14A-3 Macro AD-AS Model
 
-In Exhibit 14A-3,the level of real GDP represented by Yp:
A) is potential real GDP for this economy. 
B) indicates that the economy is experiencing zero inflation. 
C) indicates that the economy is experiencing a recessionary gap. 
D) would be associated with considerable unemployment.

Quizplus · Accepted Answer

The level of real GDP represented by Yp in Exhibit 14A-3 is potential real GDP for this economy. This is because Yp represents the level of output that can be produced using all available resources without causing inflation. Therefore, it is the maximum sustainable level of output for this economy.

TYP: SA Exhibit 14A-3 Macro AD-AS Model