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Which of the following are true of an economy operating at full employment? Check all that apply. Actual real GDP is less than potential real GDP. The economy is operating at the natural rate of unemployment. Cyclical unemployment is negligible. The GDP gap is negligible.

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Answer:

  • The economy is operating at the natural rate of unemployment: By definition, natural rate of unemployment is related to the unmeployees  that remain unemployed when there is full employment in the economy. This means that this unemployment is related to structural aspects that cannot be change suddenly (like the presence of no qualified workers) or voluntary ("frictional") unemployment (which occurs in the meantime, when people is temporary unemployed because he/she is in transition to change his/her job). TRUE
  • The GDP gap is negligible: When economy is operating at full employment, the economy reaches its potential GDP: it is employing all productive factors and producing (maximum) the amount of goods and servicies that can be produced with a given technology, labor and capital. Then, the difference between real GDP (actually produced) and potential GDP (the maximum output that can be produced) is meaninglessness. TRUE

In a situation where no insufficient demand or cyclical unemployment is there is called full employment.

The economy is the asset and resources of a nation or area in the terms of consumption and production of services and goods.

The following is true for the economy at full employment:

  • Option B. The economy is operating at the natural rate of unemployment.

  • Option D. The GDP gap is negligible.

The statements can be explained as:

  • The rate of jobless individuals that remains unemployed even during the full employment opportunity in the economy is the cause of the natural rate of unemployment.

  • The rate of unemployment cannot be changed abruptly or voluntary, therefore the economy functions at the natural pace of unemployment.

  • The GDP attains its potential during full employment and comprises all the productive elements and produced services and goods.

  • The difference between the produced GDP and potential GDP is not assessed and is negligible.

Therefore, options B and D are correct.

To learn more about full employment and economy follow the link:

https://brainly.com/question/6571157

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