In Macroland, Potential Output Equals $100 Trillion and the Natural

question 93

Multiple Choice

In Macroland, potential output equals $100 trillion and the natural rate of unemployment is 4 percent. If the actual unemployment rate is 5 percent, then the output gap equals:

• A)−1 percent.
• B)−2 percent.
• C)1 percent.
• D)2 percent.

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Definitions:

Thurgood Marshall

The first African American Justice of the U.S. Supreme Court, serving from 1967 to 1991, known for his advocacy for civil rights and his victory in Brown v. Board of Education.

Charles Hamilton Houston

A prominent African American lawyer who played a significant role in dismantling Jim Crow laws and mentoring future leaders like Thurgood Marshall.

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