If the economy is expanding beyond its long-run capabilities,we know that
A) we are in a depression.
B) we are in a recession.
C) actual unemployment is above its natural rate.
D) actual unemployment is at its natural rate.
E) actual unemployment is less than its natural rate.

Question

Quizplus · Accepted Answer

When the economy is expanding beyond its long-run capabilities, it means that there is a shortage of labor and resources, leading to low unemployment rates and a high demand for goods and services. This indicates that actual unemployment is less than its natural rate.

If the Economy Is Expanding Beyond Its Long-Run Capabilities,we Know