In the short run,but not in the long run,
A)actual output can equal potential output
B)cyclical unemployment can exist
C)structural unemployment can exist
D)frictional unemployment can exist
E)real and nominal GDP can differ

Question

Quizplus · Accepted Answer

Cyclical unemployment is a type of unemployment that is caused by a downturn in the business cycle, which results in a shortfall of demand for goods and services. In the short run, firms may not be able to adjust their production levels to match the reduced demand, leading to cyclical unemployment. However, in the long run, firms have more flexibility to adjust their production levels, and the economy returns to potential output, eliminating cyclical unemployment.

In the Short Run,but Not in the Long Run