Comparing current real GDP growth to _______ will give a good indication of the change in the unemployment rate.

Question

Quizplus · Accepted Answer

Comparing current real GDP growth to average real GDP growth will give a good indication of the change in the unemployment rate because real GDP growth is closely related to job growth. If the economy is growing at a faster rate than the average, this could indicate that more jobs are being created, leading to a decrease in the unemployment rate. On the other hand, if the economy is growing at a slower rate than the average, this could indicate that fewer jobs are being created, which could lead to an increase in the unemployment rate. Nominal GDP growth and real growth rates for the past two years may be useful in other contexts but will not provide as direct an indication of unemployment rate changes as comparing to average real GDP growth.

Comparing Current Real GDP Growth to _______ Will Give a Good