When real GDP is less than potential GDP, there is ________ which ...

[armygirl]

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.

[recede]

Answer to Question 1

A

Answer to Question 2

D

[armygirl]

YES! Correct, THANKS for helping me on my review

[gcook]

Thanks for the timely response, appreciate it