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

Question

Quizplus · Accepted Answer

When Real GDP is equal to Natural Real GDP, the economy is in long-run equilibrium. At this point, the actual unemployment rate is equal to the natural unemployment rate, which means there is equilibrium in the labor market. Therefore, option A is the correct answer.

When the Current State of the Economy Is Such That