AP Macroeconomics 2.7: Business Cycles
Identify business-cycle phases and turning points, then distinguish recessionary and inflationary gaps using actual and potential output.
- Syllabus
- Effective Fall 2025
- Course
- AP Macroeconomics
Covered syllabus points
2.7 Business Cycles question 1
[Maximum number: 1]
Assume that in the country of Zeta, the civilian noninstitutional population aged 16 and over is 1,000,000. The labor force participation rate is 70%, the unemployment rate is 9%, and the natural rate of unemployment is 5\%.
Is the economy of Zeta currently experiencing a recessionary gap, an inflationary gap, or no output gap? Explain.
State that the country of Zeta is currently experiencing a recessionary gap and explain
that the current unemployment rate (9\%) is higher than the natural rate of
unemployment (5\%).
1 point
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