If real GDP is greater than potential GDP, then:
A. the output gap is negative.
B. the actual unemployment rate is lower than the natural rate of unemployment.
C. the actual unemployment rate equals zero.
D. the actual unemployment rate is greater than the natural rate of unemployment.
Answer: B
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When aggregate planned expenditure is less than GDP,
A) the economy definitely is at its equilibrium expenditure but even so, firms decrease production. B) firms increase production until the economy reaches equilibrium expenditure. C) the economy definitely is at its equilibrium expenditure and firms do not change production. D) firms decrease production until the economy reaches equilibrium expenditure. E) the economy might be at its equilibrium expenditure and if it is, firms do not change their production.
"Stranded costs" complicated restructuring in the electricity industry
Indicate whether the statement is true or false