When the unemployment rate is less than the natural unemployment ...

[fox]

When the unemployment rate is less than the natural unemployment rate
 
  A) the output gap is positive.
  B) the output gap equals zero.
  C) the output gap is negative.
  D) None of the above is possible because it is impossible for the unemployment rate to be less than the natural rate.

Question 2

In the above figure, the letters A, B, and C represent which positions in the business cycle?
 
  A) peak, expansion, and recession, respectively
  B) recession, expansion, and peak, respectively
  C) expansion, peak, and recession, respectively
  D) peak, recession, and expansion, respectively

[Silverbeard98]

Answer to Question 1

A

Answer to Question 2

D

[fox]

Excellent

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