Author Question: When real GDP is less than potential GDP, there is ________ which leads the unemployment rate to ... (Read 72 times)

armygirl · **on:** Jun 29, 2018

When real GDP is less than potential GDP, there is ________ which leads the unemployment rate to ________.

A) a recessionary gap; rise
B) a recessionary gap; decline
C) an inflationary gap; rise
D) an inflationary gap; remain at the natural level
E) a recessionary gap; remain at the natural level

Question 2

According to Okun's Law, when the natural employment rate is 6 percent and potential GDP is 10 trillion, then when actual employment is 5 percent, real GDP is

A) 10.1 trillion. B) 9.9 trillion. C) 9.8 trillion. D) 10.2 trillion. E) 8 trillion.