If Real GDP Exceeds Potential GDP, Then the Unemployment Rate

question 61

Multiple Choice

If real GDP exceeds potential GDP, then the unemployment rate _{-------------}the natural unemployment rate.

• A)is greater than
• B)equals
• C)is less than
• D)The premise of the question is incorrect because the relationship between real GDP and potential GDP has nothing to do with the relationship between the unemployment rate and the natural unemployment rate.
• E)The premise of the question is incorrect because real GDP can never exceed potential GDP.

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Definitions:

Midterm Election

Elections held midway through the term of the President of the United States, used to elect various members of congress, including all of the House of Representatives and one-third of the Senate.

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Members of the Republican Party, one of the two major political parties in the United States, traditionally emphasizing free market policies, limited government, and strong national defense.

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