Consider the following table and identify equilibrium GDP. If the potential GDP is at 12.0, what can you conclude about price levels and the unemployment rate? Current Price Level Real GDP-quantity demanded per trillion Real GDP-quantity supplied per trillion 6.0 10.0 120 115 110 100 8.0 11.0 13.0 8.0 6.0 5.0 The economy has high unemployment but experiences stable price levels because the economy operates below the potential GDP O The economy has stable price levels and low unemployment because it is operating above the potential GDP. O The economy is experiencing rising price levels and has a low unemployment rate because it is operating above the potential GDP.

Consider the following table and identify equilibrium GDP. If the potential GDP is at 12.0, what can you conclude about price levels and the unemployment rate? Current Price Level Real GDP-quantity demanded per trillion Real GDP-quantity supplied per trillion 6.0 10.0 120 115 110 100 8.0 11.0 13.0 8.0 6.0 5.0 The economy has high unemployment but experiences stable price levels because the economy operates below the potential GDP O The economy has stable price levels and low unemployment because it is operating above the potential GDP. O The economy is experiencing rising price levels and has a low unemployment rate because it is operating above the potential GDP.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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