if the economy is producing at potential gdp.\no a. inflation in the economy is at its natural rate.\no b…

if the economy is producing at potential gdp.\no a. inflation in the economy is at its natural rate.\no b. unemployment is at its natural rate.\no c. the phillips curve must be positively sloped.\no d. the short - run aggregate supply curve must be vertical.

if the economy is producing at potential gdp.\no a. inflation in the economy is at its natural rate.\no b. unemployment is at its natural rate.\no c. the phillips curve must be positively sloped.\no d. the short - run aggregate supply curve must be vertical.

Answer

Brief Explanations:

When the economy is producing at potential GDP, it is at full - employment output. At full - employment output, unemployment is at its natural rate. The natural rate of unemployment includes frictional and structural unemployment. Inflation isn't necessarily at its natural rate just because of potential GDP production. The Phillips curve isn't always positively sloped, and the short - run aggregate supply curve is upward sloping, not vertical at potential GDP.

Answer:

B. unemployment is at its natural rate.