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In Macroland, Potential Output Equals $100 Trillion and the Natural

Question 93

Multiple Choice

In Macroland, potential output equals $100 trillion and the natural rate of unemployment is 4 percent. If the actual unemployment rate is 5 percent, then the output gap equals:


A) −1 percent.
B) −2 percent.
C) 1 percent.
D) 2 percent.

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