If the economy is self-regulating and current Real GDP is greater than Natural Real GDP,the economy is operating __________ the natural unemployment rate and wages will soon __________.
A) below; fall.
B) above; fall
C) below; rise
D) above; rise
E) none of the above

Question

Quizplus · Accepted Answer

When Real GDP is greater than Natural Real GDP, the economy is operating below the natural unemployment rate, leading to upward pressure on wages as employers compete for a limited supply of workers.

If the Economy Is Self-Regulating and Current Real GDP Is