The "Acceleration" Property States by Definition That

question 17

Multiple Choice

The "acceleration" property states by definition that

• A) the unemployment rate must exceed the natural rate if actual GDP falls short of its potential.
• B) the unemployment rate must fall short of the natural rate if actual GDP exceeds its potential.
• C) the unemployment rate is independent of any accelerated inflation caused by outside price shocks.
• D) any attempt to keep actual GDP above its potential must produce accelerating rates of inflation.
• E) unemployment can be maintained at the natural rate even given accelerating inflation.

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Definitions:

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period of time, typically measured annually.

Average Level

A mean or typical value obtained by dividing the total of all observed values of a variable by the number of observations.

Discouraged Workers

Individuals who are not actively seeking employment due to believing that no jobs are available for them or there are no jobs for which they would qualify.

Frictional Unemployment

Unemployment that occurs when people are between jobs or are entering the workforce for the first time.