If Real GDP Is Less Than Potential GDP, Then

question 47

Multiple Choice

If real GDP is less than potential GDP, then:

• A)the actual unemployment rate is greater than the natural rate of unemployment.
• B)the actual unemployment rate equals zero.
• C)the output gap is positive.
• D)the actual unemployment rate is less than the natural rate of unemployment.

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Definitions:

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, revenue, expenses, and cash flows of a parent company and its subsidiaries as one entity.

Equity Method

A method of accounting that allows a company to record profits and losses based on its share of ownership in another company.

Controlling Influence

The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, typically seen in parent-subsidiary relationships.

Held-To-Maturity Securities

Debt securities that a firm has the intent and ability to hold until they mature rather than trading them.