When the Unemployment Rate Is Less Than the Natural Unemployment

question 6

Multiple Choice

When the unemployment rate is less than the natural unemployment rate, real GDP is _______ than potential GDP and the output gap is _______.

• A)greater; positive
• B)greater; equal to zero
• C)smaller; positive
• D)smaller; negative
• E)greater; negative

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Definitions:

Cross-sectional

Pertains to research that involves analyzing data from a population, or a representative subset, at a specific point in time.

Longitudinal

A research design or study that follows subjects over a period of time, allowing for the observation of long-term effects or changes.

Participants

Individuals who take part in a research study or experiment.

Impulsive

Characterized by actions taken without forethought or consideration of the consequences; spontaneous behavior.