When the Labor Market Is in Equilibrium

question 260

Multiple Choice

When the labor market is in equilibrium,

• A)there is excess labor supplied,which keeps real GDP less than potential GDP.
• B)there is full employment,which means that real GDP equals potential GDP.
• C)the real wage rate falls to equal the nominal wage rate because real GDP is greater than potential GDP.
• D)the real wage rate rises to allow real GDP to equal potential GDP.
• E)there is full employment but real GDP might be greater than,less than,or equal to potential GDP.

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Definitions:

Sequential

Following a specific logical order or sequence.

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