If the natural unemployment rate is 5.5 percent,then the economy is in a recessionary gap when the actual unemployment rate is
A) greater than 5.5 percent.
B) between 0 and 5.5 percent.
C) 0 percent.
D) 5.5 percent.

Question

Quizplus · Accepted Answer

The natural unemployment rate represents the rate of unemployment that exists when the economy is operating at its potential output level. Therefore, if the actual unemployment rate is greater than 5.5 percent, it means that there are more unemployed workers than would be expected in a fully functioning economy, indicating a recessionary gap.

If the Natural Unemployment Rate Is 5