In Macroland,potential Output Equals $100 Trillion and the Natural Rate

question 42

Multiple Choice

In Macroland,potential output equals $100 trillion and the natural rate of unemployment is 4%.If the actual unemployment rate is 3%,then the output gap equals

• A) - $4 trillion.
• B) - $2 trillion.
• C) - $1 trillion.
• D) $1 trillion.
• E) $2 trillion.

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Definitions:

Pulmonary Vein

A blood vessel that carries oxygenated blood from the lungs to the left atrium of the heart.

Peripheral Vasodilatation

The expansion of blood vessels in the outer parts of the body, which can increase blood flow and decrease blood pressure.