The natural rate of output is the amount of real GDP produced when
A) the economy is at the natural rate of unemployment.
B) the economy is at the natural rate of investment.
C) the economy is at the natural rate of aggregate demand.
D) there is no unemployment.

Question

Quizplus · Accepted Answer

The natural rate of output is the level of real GDP produced when the economy is at the natural rate of unemployment, which is the unemployment rate that corresponds to potential output. At the natural rate of output, the economy is producing at its full capacity without causing inflationary pressure.

The Natural Rate of Output Is the Amount of Real