Suppose Actual Output Is Less Than Potential Output

question 83

Multiple Choice

Suppose actual output is less than potential output. If the output gap measures the output loss due to the failure to achieve full employment, it can generally be concluded that the larger this output gap, the

• A)lower is frictional unemployment.
• B)greater is the employment rate.
• C)more upward pressure there is on prices.
• D)lower the deadweight loss of unemployment.
• E)greater is the unemployment rate.

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