If the Negative GDP Gap Were Equal to 4 Percent

question 91

Multiple Choice

If the negative GDP gap were equal to 4 percent of the potential GDP, Okun's law suggests that the actual unemployment rate would exceed the natural rate of unemployment by

• A) one percentage point.
• B) two percentage points.
• C) three percentage points.
• D) four percentage points.

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Definitions:

Owner's Capital Account

Represents the total equity or investment that the owner has in the business, including initial investment and subsequent profits or losses.

Balance

The amount of money or value remaining in an account after accounting for debits and credits.

Income Summary

An account used in the closing process that summarizes the revenue and expenses for a specific accounting period.

Expenses Accounts

Accounts that track money spent or costs incurred in a company’s operations to generate revenue.