When the current state of the economy is such that Real GDP is greater than Natural Real GDP,the economy is in a(n)____________________ gap.In this situation,the (actual)unemployment rate is ___________ than the natural unemployment rate,and there is a ________________ in the labor market.
A) recessionary; greater; shortage
B) inflationary; less; shortage
C) inflationary; greater; surplus
D) recessionary; greater; surplus
E) recessionary; less; shortage

Question

Quizplus · Accepted Answer

When Real GDP is greater than Natural Real GDP, the economy is experiencing an inflationary gap. In this situation, the actual unemployment rate is lower than the natural unemployment rate, indicating that demand for labor is high, leading to a shortage in the labor market.

When the Current State of the Economy Is Such That