When actual real GDP is equal to the natural real GDP,the unemployment rate is
A)zero.
B)at its "natural" rate.
C)accelerating.
D)decelerating.

Question

Quizplus · Accepted Answer

When actual real GDP is equal to natural real GDP, the economy is producing at its potential level without any inflationary pressures. This means that the economy is at its "natural" rate of unemployment, which is the lowest level of unemployment achievable without causing inflation. This rate is usually between 4% to 6%. Therefore, the correct answer is B - at its "natural" rate.

When Actual Real GDP Is Equal to the Natural Real