Ceteris paribus,Real GDP and the unemployment rate are
A)directly related.
B)inversely related.
C)unrelated.
D)directly related when GDP is below its natural level and inversely related when GDP is above its natural level.

Question

Quizplus · Accepted Answer

Real GDP and the unemployment rate are generally inversely related. When Real GDP is high, firms are producing a lot and need more workers, which leads to low unemployment. However, when Real GDP is low, firms are producing less and can make do with fewer workers, which results in high unemployment.

Ceteris Paribus,Real GDP and the Unemployment Rate Are