The economy equilibrium long-run stock of capital

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An article in the Economist states that the value of potential GDP: "is almost impossible to pin down in real time since the economy's equilibrium long-run stock of capital and labour are so difficult to estimate with precision..." By "real time," the article means A.the time at which the government decides about spending. B. the time at which GDP is released. C. at any point in actual time." D. the time during which analysts make predictions. (25.2) Difficulty in estimating the "long-run stock of capital and labour" creates difficulty in estimating the value of potential GDP in real time because A. potential GDP is determined by the availability of resources, especially capital and labor. B. the long-run stock of labor and capital rarely change. C.potential GDP causes changes in the long-run stock of capital and labor. D. the long-run stock of labor and capital usually fall over time. (25.3) The difficulty of estimating potential GDP matters for policymakers because ideally, equilibrium GDP should occur A. at potential GDP B. below potential GDP C. above potential GDP.

Reference no: EM131112273

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