According to the AS-AD model, when real GDP is less than ...

[dbose]

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.

[taylorsonier]

Answer to Question 1

D

Answer to Question 2

E

[dbose]

Excellent

[Laurenleakan]

Thanks for the timely response, appreciate it