According to the AS-AD Model, When Real GDP Is Less

question 197

Multiple Choice

According to the AS-AD model, when real GDP is less than potential GDP the unemployment rate is definitely

• A) less than the natural unemployment rate.
• B) equal to the natural unemployment rate.
• C) greater than the natural unemployment rate.
• D) falling.
• E) rising.

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Definitions:

Sales

The total revenue generated from goods or services sold by a company.

Net Operating Income

Revenue derived from the principal activities of a business before interest and taxes are subtracted.

Sales Dollars

The entire income produced through the selling of products or services, denoted in financial figures.

Fixed Cost

A cost that does not change with the level of output or sales over a certain period, such as rent or salaries.