Below Are Pairs of GDP Growth Rates and Unemployment Rates

question 193

Multiple Choice

Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these pairs. Which of the following pairs of GDP growth rates and unemployment rates is most realistic?

• A)6 percent, 0 percent
• B)3 percent, 20 percent
• C)-1 percent, 6 percent
• D)-3 percent, 2 percent

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Definitions:

Too Little Consumption

A situation where individuals or the economy as a whole are consuming less than optimal, possibly leading to underutilization of resources and a decrease in economic wellbeing.

Nonexcludable

A characteristic of public goods where it is not feasible to exclude individuals from using the good, leading to potential free-rider problems.

Common Resource

A resource, like air or water, that is accessible to all members of a society but subject to overuse and depletion.

Negative Externalities

Costs suffered by a third party due to an economic transaction they were not involved in.