Question

if real gdp is increasing at 5% per year and nominal gdp is increasing at 10% per year, which of the following is necessarily true? unemployment is increasing the economy is in a recession the price level is increasing the government is running a budget surplus imports exceed exports the official unemployment rate is not always the most accurate indicator of actual unemployment in the economy because structural unemployment is less than cyclical unemployment at the going wage rate full employment is greater than the labor force the unemployment rate is greater than natural unemployment the official rate does not include persons who have given up looking for work part time workers are considered unemployed

Explanation:

For the first question: Nominal GDP growth equals real GDP growth plus inflation rate. With nominal GDP growing faster than real GDP, inflation (price level increase) must occur. The other options are not necessarily linked to this GDP growth gap.
For the second question: The official unemployment rate only counts those actively seeking work. Discouraged workers (who stopped job searching) are excluded, making it an inaccurate measure of total actual unemployment.

Answer:

1. The price level is increasing
2. The official rate does not include persons who have given up looking for work