During a Recession, How Does Output Relate to Its Potential

question 120

Multiple Choice

During a recession, how does output relate to its potential and unemployment relate to the natural rate?  

• A) Output is above potential, and unemployment is below the natural rate. 
• B) Output is above potential, and unemployment is above the natural rate. 
• C) Output is below potential, and unemployment is below the natural rate. 
• D) Output is below potential, and unemployment is above the natural rate.