Question

The AD/AS model shows _____ unemployment by how close the economy is to potential GDP. Group of answer choices cyclical frictional natural structural In the Keynesian Zone, the economy is likely in a _____ and real GDP is _____ potential GDP. Group of answer choices growth period; close to recession; well below

Answer 1

1. Cyclical unemployment

Explanation-

Cyclical unemployment occurs when there is low demand for goods and services. It happens at time of economic slowdown or recession. An AD/AS model, shows cyclical unemployment by how close the economy is to the potential GDP.

2. Close to recession, well below.

Explanation-

Keynes law states that demand creates its own supply that is output to be produced in the economy will be determined by the demand. In the Keynesian zone, the equilibrium level of real GDP is well below potential GDP and the economy is in recession.