Author Question: According to the AS-AD model, when real GDP is less than potential GDP, the unemployment rate is ... (Read 70 times)

dbose · **on:** Jun 29, 2018

According to the AS-AD model, when real GDP is less than potential GDP, the unemployment rate is definitely

A) equal to the natural unemployment rate.
B) rising.
C) falling.
D) greater than the natural unemployment rate.
E) less than the natural unemployment rate.

Question 2

If the economy is on its short-run Phillips curve at the natural unemployment rate, then in the AS-AD model, real GDP is definitely

A) decreasing.
B) greater than potential GDP.
C) less than potential GDP.
D) increasing.
E) equal to potential GDP.