If the economy is operating at an unemployment rate above the full employment rate,

Question

Quizplus · Accepted Answer

When the economy is operating at an unemployment rate above the full employment rate, it means that there is a cyclical unemployment problem, which implies that actual output is below potential output. This is because the economy is not using all its available resources, and hence, it is producing fewer goods and services than it could at full employment.

If the Economy Is Operating at an Unemployment Rate Above