When the Unemployment Rate Is Relatively High, We Can Conclude

question 88

Multiple Choice

When the unemployment rate is relatively high, we can conclude that:

• A)the economy is in the expansion phase of the business cycle.
• B)potential GDP is in excess of actual GDP.
• C)actual GDP is in excess of potential GDP.
• D)actual GDP is equal to potential GDP.

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Definitions:

Elastic Demand

An instance where the demand for a product exhibits substantial sensitivity to adjustments in its pricing.

Price Rise

An increase in the cost of goods or services, often due to factors such as inflation, demand surges, or production costs.

Concept of Elasticity

An economic measure of the sensitivity of an economic variable, such as demand or supply, in response to a change in another variable, such as price.

Supply and Demand

Economic model of price determination in a market that concludes that the price of a good is determined by its availability (supply) and the desires of those with purchasing power (demand).