When the Unemployment Rate Is Greater Than the Natural Unemployment

question 107

Multiple Choice

When the unemployment rate is greater than the natural unemployment rate,real GDP is

• A)greater than potential GDP.
• B)less than potential GDP.
• C)unrelated to potential GDP.
• D)equal to potential GDP.
• E)greater than full employment GDP.

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Definitions:

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s initial cost.

Efficient Markets

A concept in financial economics that states that asset prices fully reflect all available information at any point in time.

Expected Return

The probable return on an investment, considering all potential outcomes and their likelihoods.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in statistics to quantify the spread of data.