The output gap of zero indicates that
A) nominal GDP is equal to Real GDP.
B) GDP is equal to GNP.
C) the balance between unemployment and inflation has been reached.
D) actual real GDP is equal to natural real GDP.
D
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Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, the result in the market for leather belts will be a
A) lower equilibrium price for a leather belt because there is an increase in the supply of leather belts. B) lower equilibrium price for a leather belt because there is a decrease in the supply of leather belts. C) higher equilibrium price for a leather belt because there is a decrease in the supply of leather belts. D) higher equilibrium price for a leather belt because there is an increase in the supply of leather belts.
We would expect that a rise in labor supply will have a proportionately larger effect on the market wage rate when
A) the demand for labor is unitary elastic. B) the demand for labor is inelastic. C) the supply for labor is elastic. D) the demand for labor is elastic.