If the Natural Rate of Unemployment Is 4

question 171

Multiple Choice

If the natural rate of unemployment is 4.5 percent and the actual unemployment rate is 6.5 percent, then Okun's law indicates that the GDP gap is

• A) 2 percent.
• B) 3 percent.
• C) 4 percent.
• D) 6 percent.

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Definitions:

Financial Statements

Financial statements are written records that convey the business activities and the financial performance of a company, including balance sheet, income statement, and cash flow statement.

Net Income

Net income is the total profit of a company after all expenses and taxes have been subtracted from total revenue.

Hedge Accounting

Accounting techniques that modify the standard rules of accounting to recognize the offsetting effects on the financial statements of both the hedged item and the hedging instrument.

Mandatory

Required or obligatory; something that must be done or adhered to.