According to Okun's Law, When the Output Gap Is Positive

question 110

Multiple Choice

According to Okun's Law, when the output gap is positive, cyclical unemployment:

• A) equals structural unemployment.
• B) equals frictional unemployment.
• C) equals zero.
• D) is negative.

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Definitions:

Contribution Margin

The amount by which a product's sales revenue exceeds its variable costs, used to cover fixed costs and towards profit.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Incremental Cost

Incremental cost is the additional cost associated with producing one more unit of a product or service.

Operating Cash Flow

Operating cash flow is a measure of the cash generated by a company's regular business operations, indicating the company's ability to generate sufficient positive cash flow to maintain and grow its operations.