When the unemployment rate _________ the natural unemployment ...

[bobbie]

When the unemployment rate _________ the natural unemployment rate, real GDP is _________ potential GDP and the output gap is _________.
 
  A. exceeds; below; negative
  B. is below; below; negative
  C. exceeds; above; positive
  D. is below; above; negative

Question 2

Explain the optimal strategy that a price discriminating firm would use when pricing in markets with different elasticities.
 
  What will be an ideal response?

[vickyvicksss]

Answer to Question 1

A When the unemployment rate exceeds the natural unem-ployment rate, the economy is in a recession with real GDP is less than potential GDP so the output gap is negative.

Answer to Question 2

The optimal strategy for a firm that can sell in more than one market is to charge higher prices in markets with low demand elasticities and vice versa.

[bobbie]

Wow, this really help

[sultansheikh]

Gracias!