Question

if real gdp is less than natural real gdp, then the (actual) unemployment rate is a. less than or greater than the natural unemployment rate, but we cannot determine which one. b. equal to the natural unemployment rate. c. less than the natural unemployment rate.

Answer 1

The actual unemployment rate will be either less than or greater than the natural unemployment rate when real GDP is less than natural real GDP.

Step-by-step explanation:

The natural unemployment rate is related to two other important concepts: full employment and potential real GDP. When the actual unemployment rate is less than the natural unemployment rate, it means that the economy is below full employment. In this situation, the actual unemployment rate is greater than the natural unemployment rate. Therefore, the correct answer is a. less than or greater than the natural unemployment rate, but we cannot determine which one.