Author Question: According to the AS-AD model, when real GDP exceeds potential GDP, the unemployment rate is ... (Read 109 times)

yoroshambo · **on:** Jun 29, 2018

According to the AS-AD model, when real GDP exceeds potential GDP, the unemployment rate is definitely

A) less than the natural unemployment rate.
B) greater than the natural unemployment rate.
C) rising.
D) falling.
E) equal to the natural unemployment rate.

Question 2

Comparing the AS-AD model and the Phillips curve, we see that

A) they both are graphed as a relationship between the rate of inflation and the unemployment rate.
B) the AS-AD model uses the price level and the Phillips curve uses the rate of inflation.
C) the AS-AD model is graphed as a relationship between the inflation rate and the rate of real GDP.
D) the AS-AD model uses the price level and the Phillips curve uses real GDP.
E) the Phillips curve is graphed as a relationship between the price level and the unemployment rate.