When there is a recessionary gap, (actual) Real GDP is __________ Natural Real GDP, and the (actual) unemployment rate is __________ the natural unemployment rate
A) greater than; less than
B) greater than; greater than
C) greater than; equal to
D) less than; greater than
E) less than; less than
D
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If real GDP and aggregate expenditure are greater than equilibrium expenditure, what happens to firms' inventories? How do firms change their production? And what happens to real GDP?
What will be an ideal response?
What is the inflation gap? What is the output gap?
What will be an ideal response?
In the short-run macro model, which of the following increases when government spending increases?
a. The interest rate b. Investment spending c. Taxes d. Spending on consumer durables e. The money supply
Which of the following changes in the price index produces the greatest rate of inflation: 12 to 15, 20 to 24, or 30 to 35?
a. 12 to 15 b. 20 to 24 c. 30 to 35 d. All of these changes produce the same rate of inflation.