When real GDP is __________potential GDP, the unemployment rate is __________the natural unemployment rate.
A) greater than; greater than
B) greater than; less than
C) equal to; greater than
D) less than; equal to

Question

Quizplus · Accepted Answer

When real GDP is greater than potential GDP, the economy is operating above its full capacity, leading to lower unemployment rates than the natural rate due to increased demand for labor.

When Real GDP Is __________Potential GDP, the Unemployment Rate Is