Mac 9

When the economy is at its full employment Real GDP, the unemployment rate is equal to
Select one:

• b. the natural unemployment rate.

• d. the structural unemployment rate.

• c. the frictional unemployment rate.

• a. zero.

An economy is producing its Natural Real GDP when the rate of unemployment is equal to the __________ unemployment rate.
Select one:

• c. sum of the frictional unemployment rate and the structural

• e. cyclical

• d. seasonal

• b. structural

• a. frictional

If Real GDP is less than Natural Real GDP, the economy is in
Select one:

• b. a recessionary gap.

• d. a real gap.

• c. an unemployment gap.

• a. an inflationary gap.

If the SRAS curve intersects the AD curve to the left of Natural Real GDP, the economy is
Select one:

• a. in a recessionary gap.

• b. at Natural Real GDP.

• c. in an inflationary gap.

• d. at full-employment Real GDP.

If the SRAS curve intersects the AD curve to the right of Natural Real GDP, the economy is
Select one:

• c. in an inflationary gap.

• d. at full-employment Real GDP.

• b. at Natural Real GDP.

• a. in a recessionary gap.

If Real GDP is less than Natural Real GDP, then the (actual) unemployment rate is
Select one:

• c. greater than the natural unemployment rate.

• a. less than the natural unemployment rate.

• b. equal to the natural unemployment rate.

• d. equal to full employment.

• e. b and d

If Real GDP is greater than Natural Real GDP, the economy is in a(n)
Select one:

• d. inflationary gap.

• c. recessionary gap.

• b. structural gap.

• a. frictional gap.

If the economy is currently in a recessionary gap,
Select one:

• b. some economists will argue that the economy can remove the gap itself.

• a. all economists will argue that the economy can remove the gap itself.

• c. no economist will argue that the economy can remove the gap itself.

• d. all economists will argue that over time the recessionary gap will worsen.

If the natural unemployment rate is 5 percent and the current unemployment rate is 6 percent, then the economy is
Select one:

• c. producing less Real GDP than it does at full employment.

• a. producing more Real GDP than it does at full employment.

• b. in an inflationary gap.

• d. a and b

• e. b and c

The long-run aggregate supply (LRAS) curve is
Select one:

• b. vertical.

• d. negatively sloped.

• c. positively sloped.

• a. horizontal.