If Real GDP Is Increasing at a 2 Percent Annual

question 55

Multiple Choice

If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent,the economy is

• A) not achieving full economic potential
• B) experiencing an increase of 2 percent in real annual per capita GDP
• C) experiencing a slump
• D) experiencing high prices and low inflation
• E) producing along its production possibilities frontier