For a country, economists have estimated that structural unemployment is 2.0% and Frictional unemployment is 3.0%. If total unemployment is currently 4.0%, this suggests that: a) The economy is in a recessionary gap, with actual output greater than potential output. b) The economy is in an inflationary gap, with actual output greater than potential output. c) There is no output gap, and actual output is equal to potential output. d) The economy is in a recessionary gap, with actual output less than potential output. e) The economy is in an inflationary gap, with actual output less than potential output.

For a country, economists have estimated that structural unemployment is 2.0% and Frictional unemployment is 3.0%. If total unemployment is currently 4.0%, this suggests that: a) The economy is in a recessionary gap, with actual output greater than potential output. b) The economy is in an inflationary gap, with actual output greater than potential output. c) There is no output gap, and actual output is equal to potential output. d) The economy is in a recessionary gap, with actual output less than potential output. e) The economy is in an inflationary gap, with actual output less than potential output.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Aggregate Supply

Section: Chapter Questions

Problem 1.1P

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