Which of the following is true?
A. Frictional unemployment implies a lack of available jobs.
B. During a recession, cyclical unemployment will be low.
C. When an economy is at full employment, actual unemployment will be less than the natural rate of unemployment.
D. When actual GDP equals potential GDP, the actual unemployment rate will equal the economy's natural rate of unemployment.
Answer: D
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If a 1 percent increase in the price of X increases the quantity demanded of Y by 2 percent, then X and Y are
A) complements and the cross elasticity of demand equals 2. B) substitutes and the cross elasticity of demand equals 1/2. C) substitutes and the cross elasticity of demand equals 2. D) complements and the income elasticity of demand equals 2. E) normal goods and the income elasticity of demand of each equals 2.
An decrease in the price level in the United States will shift the aggregate expenditure line downward
Indicate whether the statement is true or false