When the Unemployment Rate Drops Below the Natural Unemployment Rate

question 52

Multiple Choice

When the unemployment rate drops below the natural unemployment rate,

• A)the economy is in a recession.
• B)real GDP is rising above potential GDP.
• C)real GDP is falling below potential GDP.
• D)the capacity utilization rate is declining.
• E)All of these

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Definitions:

Simple Interest

A method of calculating interest where the charge is based on the original principal amount alone, without compounding.

Interest

Interest is the cost of borrowing money, typically expressed as a percentage of the principal amount.

Rate Of Interest

The percentage of principal charged by the lender for the use of its money.

Equivalent

Equal in value, amount, function, meaning, or the like.