25484479
Description
Flashcards by Sophia Lynch, updated more than 1 year ago
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Created by Sophia Lynch
about 5 years ago
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| Question | Answer |
| At potential output, what happens to unemployment? | Y = Y* --> u = u* --> cyclical unemployment = 0 |
| At RealGDP, what happens to unemployment? | Y < Y* resulting in a recessionary gap --> u > u* --> cyclical unemployment is (+) |
| What happens to unemployment when the economy is producing more than potential? | Y > Y* resulting in an expansionary gap --> u < u* --> cyclical unemployment is (-) |
| What is u*? | The estimate of what u will be. |
| What are changes in realGDP inversely related to? | Changes in the unemployment rate. |
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