Questions: The level of real GDP produced in an economy when it is operating at the natural rate of unemployment is called: expansionary GDP. full output. full-employment GDP. the natural rate of GDP.

The level of real GDP produced in an economy when it is operating at the natural rate of unemployment is called:
expansionary GDP.
full output.
full-employment GDP.
the natural rate of GDP.

Transcript text: The level of real GDP produced in an economy when it is operating at the natural rate of unemployment is called: expansionary GDP. full output. full-employment GDP. the natural rate of GDP.

Solution

Answer

The answer is full-employment GDP.

Explanation

Option 1: Expansionary GDP

Expansionary GDP refers to a situation where the economy is growing and expanding, often beyond its long-term sustainable rate. It is not specifically related to the natural rate of unemployment.

Option 2: Full Output

Full output is a general term that could refer to the maximum potential output of an economy, but it is not a standard term used to describe the level of GDP at the natural rate of unemployment.

Option 3: Full-employment GDP

Full-employment GDP is the level of real GDP produced when the economy is operating at the natural rate of unemployment. This is the correct term because it reflects the output level where all available resources are being used efficiently, without causing inflation.

Option 4: The Natural Rate of GDP

The natural rate of GDP is not a standard economic term. The natural rate typically refers to unemployment, not GDP. Therefore, this option is incorrect.

Was this solution helpful?

Unhelpful

Helpful

Questions asked by other users

< Previous Next >

Thank you for your feedback.

Copied!