Exhibit 11-6 -In Exhibit 11-6, at income level Y 1

At income level Y1, if the actual unemployment rate is greater than the natural rate of unemployment, it indicates that the economy is operating below its potential output, leading to a recessionary gap rather than an expansionary one.

Exhibit 11-6 -In Exhibit 11-6, at income level Y 1

At income level Y1, if the actual unemployment rate is greater than the natural rate of unemployment, it indicates that the economy is operating below its potential output, leading to a recessionary gap rather than an expansionary one.

Solved

Exhibit 11-6 -In Exhibit 11-6, at Income Level Y₁

Question 139

Multiple Choice

Exhibit 11-6 Exhibit 11-6 -In Exhibit 11-6, at income level Y<sub>1</sub> A) potential output is less than actual output B) there is an expansionary gap C) the price level will rise D) aggregate supply will fall to restore equilibrium E) the actual unemployment rate is greater than the natural rate of unemployment
-In Exhibit 11-6, at income level Y₁

A) potential output is less than actual output
B) there is an expansionary gap
C) the price level will rise
D) aggregate supply will fall to restore equilibrium
E) the actual unemployment rate is greater than the natural rate of unemployment

Correct Answer: