If real GDP is less than potential GDP, then:
A)the actual unemployment rate is greater than the natural rate of unemployment.
B)the actual unemployment rate equals zero.
C)the output gap is positive.
D)the actual unemployment rate is less than the natural rate of unemployment.

Question

Quizplus · Accepted Answer

If real GDP is less than potential GDP, there is a recessionary output gap and the actual unemployment rate exceeds the natural rate of unemployment.

If Real GDP Is Less Than Potential GDP, Then