If the Natural Unemployment Rate Is 5 Percent and the Current

question 33

Multiple Choice

If the natural unemployment rate is 5 percent and the current unemployment rate is 6 percent,then the economy is

• A) producing more Real GDP than it does at full employment.
• B) in an inflationary gap.
• C) producing less Real GDP than it does at full employment.
• D) a and b
• E) b and c

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Definitions:

Employee Stock Ownership Plan

A program that provides a company's workforce with an ownership interest in the company, usually in the form of stock options or shares.

Stock Options

Financial instruments that give an employee the right to buy or sell the company's stock at a predetermined price within a specific period.

Scanlon Plan

A participative management approach that focuses on improving productivity and sharing the resulting cost savings with employees.

Collective Stock Options

A form of employee incentive where groups of workers are granted options to buy company stock at a discounted price.