Just as real GDP ________ potential GDP in the long run, the unemployment rate ________ the natural rate of unemployment in the long-run.
A)is not related to; is not related to
B)is greater than; is greater than
C)equals; equals
D)is less than; is less than

Question

Quizplus · Accepted Answer

In the long run, real GDP will equal potential GDP (the maximum level of output an economy can produce with its existing resources and technology). Similarly, the unemployment rate will equal the natural rate of unemployment (the rate of unemployment that exists when the labor market is in equilibrium and there is neither a shortage nor a surplus of labor). Therefore, option C is the correct answer.

Just as Real GDP ________ Potential GDP in the Long