CFA® Level 1: CFA® Level 1 Exam | Test Prep

CFA® Level 1: CFA® Level 1 Exam

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Question

Which of the following is true?

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Explanations

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A. B. C. D.

D

Under full employment, the rate of unemployment will be equal to the natural rate of unemployment given the economy's frictional and structural characteristics.

Potential GDP is defined as the amount of output that could be expected at full employment. Therefore, at potential GDP, the rate of unemployment is equal to the natural rate of unemployment.