If the Unemployment Rate Is 4

question 64

Multiple Choice

If the unemployment rate is 4.5 percent and the natural unemployment rate is 5.5 percent, then

• A)potential GDP equals real GDP.
• B)real GDP is greater than nominal GDP.
• C)potential GDP is greater than real GDP.
• D)we have mismeasured the natural unemployment rate.
• E)potential GDP is less than real GDP.

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Definitions:

Welfare Payments

Financial assistance provided by the government to individuals or families in need, aimed at ensuring a minimum level of well-being.

Welfare System

A governmental system that provides financial aid and services to individuals and families in need.

Dependency

A relationship in which one entity relies on another for support or sustenance.

Taste-For-Discrimination Model

An economic theory that explains how personal bias and preferences can lead to differences in wages and employment opportunities for various groups.