When the Unemployment Rate Is Less Than the Natural Unemployment

question 347

Multiple Choice

When the unemployment rate is less than the natural unemployment rate

• A) the output gap is positive.
• B) the output gap equals zero.
• C) the output gap is negative.
• D) None of the above is possible because it is impossible for the unemployment rate to be less than the natural rate.

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Definitions:

Preoperational Stage

A stage in Piaget's theory of cognitive development, occurring roughly between the ages of 2 and 7, characterized by symbolic thought and egocentrism.

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.

Language Learning

The process of acquiring the ability to comprehend and communicate within a language system, typically occurring in human early development and through exposure to the language.

A-not-B Effect

A cognitive error observed in young children where they will search for an object in a location where it was previously found (location A) rather than its new location (location B), even after they see it moved.