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If Real GDP Exceeds Potential GDP, Then the Unemployment Rate

Question 71

Multiple Choice

If real GDP exceeds potential GDP, then the unemployment rate -------------the natural unemployment rate.


A) is greater than
B) equals
C) is less than
D) The premise of the question is incorrect because the relationship between real GDP and potential GDP has nothing to do with the relationship between the unemployment rate and the natural unemployment rate.
E) The premise of the question is incorrect because real GDP can never exceed potential GDP.

Correct Answer:

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