Aggregateprice levelLRASSRAS,P,ADYpY,Real GDPWhen the output gap is negative (a recessionary gap), the unemployment rate is below the natural rate.When the output gap is negative (a recessionary gap), the unemployment rate is above the natural rate.When the output gap is positive (a inflationary gap), the unemployment rate is above the natural rate.When the output gap is positive (an inflationary gap), the unemployment rate is below the natural rate.

Unemployment rate is defined as the proportion of the labor force that is not employed or not…

Answered: When the output gap is positive (an…

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When the output gap is positive (an inflationary gap), the unemployment rate is below the natural rate.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macro Economics And The Self Regulating Economy

Section: Chapter Questions

Problem 2WNG

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Question

Aggregate
price level
LRAS
SRAS,
P,
AD
Yp
Y,
Real GDP
When the output gap is negative (a recessionary gap), the unemployment rate is below the natural rate.
When the output gap is negative (a recessionary gap), the unemployment rate is above the natural rate.
When the output gap is positive (a inflationary gap), the unemployment rate is above the natural rate.
When the output gap is positive (an inflationary gap), the unemployment rate is below the natural rate.

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