According to Okun's law, when the output gap is negative, cyclical unemployment:
A)equals structural unemployment.
B)equals frictional unemployment.
C)is negative.
D)is positive.

Name: According to Okun's law, when the output gap is negative, cyclical unemployment: A)equals structural unemployment. B)equals frictional unemployment. C)is negative. D)is positive.
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Question

Quizplus · Accepted Answer

When the output gap is negative, cyclical unemployment is positive because the actual unemployment rate exceeds the natural unemployment rate.

According to Okun's Law, When the Output Gap Is Negative