question archive If actual GDP is growing more rapidly than Potential GDP, then: The GDP Gap is becoming wider and the unemployment rate is probably increasing The GDP Gap is becoming wider and the unemployment rate is probably decreasing The GDP Gap is becoming narrower and the unemployment rate is probably increasing The GDP Gap is becoming narrower and the unemployment rate is probably decreasing
If actual GDP is growing more rapidly than Potential GDP, then: The GDP Gap is becoming wider and the unemployment rate is probably increasing The GDP Gap is becoming wider and the unemployment rate is probably decreasing The GDP Gap is becoming narrower and the unemployment rate is probably increasing The GDP Gap is becoming narrower and the unemployment rate is probably decreasing
Subject:FinancePrice:2.86 Bought8
If actual GDP is growing more rapidly than Potential GDP, then:
The GDP Gap is becoming wider and the unemployment rate is probably increasing
The GDP Gap is becoming wider and the unemployment rate is probably decreasing
The GDP Gap is becoming narrower and the unemployment rate is probably increasing
The GDP Gap is becoming narrower and the unemployment rate is probably decreasing
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Please find the solution as below:
As per the law, if real GDP exceeds the potential GDP then it is said that the GDP gap is becoming wider between the real GDP and the potential GDP and as a result of which unemployment in the country falls because more and more jobs are created and people are engaged to do work.
Therefore, option (b) is correct.
