If the current unemployment rate is less than the natural unemployment rate,then the economy is
A) in long-run equilibrium.
B) in an inflationary gap.
C) in a recessionary gap.
D) producing at full employment.
E) b and d

Question

Quizplus · Accepted Answer

When the unemployment rate is below the natural rate, it indicates that the economy is operating above its potential output, leading to an inflationary gap.

If the Current Unemployment Rate Is Less Than the Natural