Overheating of the economy means output is occurring at an unsustainably high level, at which the unemployment rate is lower than the natural rate of unemployment.

Select one:
a. The business cycle curve is below the growth trend, the economy is experiencing a negative output gap.
b. The business cycle will reach a peak and enter a recession.
c. None of the above
d. The business cycle will reach a troughand enter a recovery

= The business cycle will reach a peak and enter a recession.