When the Output Gap Is Positive, the Unemployment Rate Is

question 80

Multiple Choice

When the output gap is positive, the unemployment rate is:

• A) positive.
• B) above the natural rate.
• C) below the natural rate.
• D) negative.

---

Definitions:

Liquidity

The ease with which an asset or security can be converted into ready cash without affecting its market price.

Asset

An asset is a resource owned or controlled by an individual, corporation, or government with the expectation that it will produce positive economic value.

Cash

A form of liquid asset that includes currency and other easily accessible bank balances.

Prepaid Insurance

Refers to payments made in advance for insurance coverage, recorded as an asset on the balance sheet until the period to which the insurance relates.