Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent . a ) Use Okun's law to determine the size of the GDP gap in percentage - point terms . b ) If the potential GDP is $ 500 billion in that year , how much output is being forgone because of cyclical unemployment

Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent . a ) Use Okun's law to determine the size of the GDP gap in percentage - point terms . b ) If the potential GDP is $ 500 billion in that year , how much output is being forgone because of cyclical unemployment

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macro Economics And The Self Regulating Economy

Section: Chapter Questions

Problem 2WNG

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Assume that in a particular year the natural rate of unemployment is 5 percent and the actual rate of unemployment is 9 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment?
Assume that in a particular year the natural rate of unemployment is 5 percent and the actual rate of unemployment is 9 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the nominal GDP is $500 billion in that year, how much output is being foregone because of cyclical unemployment?
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