If the Natural Unemployment Rate Is 5 Percent and the Current

question 33

Multiple Choice

If the natural unemployment rate is 5 percent and the current unemployment rate is 6 percent,then the economy is

• A) producing more Real GDP than it does at full employment.
• B) in an inflationary gap.
• C) producing less Real GDP than it does at full employment.
• D) a and b
• E) b and c

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Definitions:

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the values by the number of values.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Standard Deviations

A measure of the amount of variation or dispersion of a set of values from the mean.

Z Score

A statistical measurement that describes a value's relationship to the mean of a group of values, expressed in standard deviations.