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If Unemployment Were 5 Percent Compared with a Natural Rate

Question 50

Multiple Choice

If unemployment were 5 percent compared with a natural rate of 5.5 percent in 1995, then the GDP gap expressed as a percentage of potential GDP would be


A) 0.5 percent.
B) 1.0 percent.
C) 1.5 percent.
D) 0 percent.
E) 2.5 percent.

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