The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

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Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

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Consider an economy that initially has a labor force of 2,000 workers. Of these workers, 1,900 are employed. The economy enters a recession. The number of employed workers falls by 4%. In addition, 0.2% of the labor force becomes discouraged at the prospect of finding a job and leaves the labor force. Show your calculation for the following. a. How many workers are unemployed before the recession? What is the unemployment rate before the recession? b. After the recession begins, what is the size of the labor force? How many workers are employed? How many workers are unemployed? What is the unemployment rate? c. Suppose that total output falls by 8% in the recession, what is the value of the Okun's law coefficient relating the loss of output to the increase in unemployment?

In the long run, as a result of the economic prosperity abroad, the price level the quantity of output the natural level of output, and the unemployment rate the natural rate of unemployment.

Identify the point or points for which the following is true: The economy is exhibiting inefficient production or unemployment

Answer 2

Question

Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

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Answer 3

Question

Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

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Answer 4

Question

Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

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Answer 5

Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

Answer 6

Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

Answer 7

Chapter 29, Problem 5SPPA

To determine

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

Answer 8

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Answer 9

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Answer 11

Ch. 29 - Prob. 1SPPA Ch. 29 - Prob. 2SPPA Ch. 29 - Prob. 3SPPA Ch. 29 - Prob. 4SPPA Ch. 29 - Prob. 5SPPA Ch. 29 - Prob. 6SPPA Ch. 29 - Prob. 7SPPA Ch. 29 - Prob. 8SPPA Ch. 29 - Prob. 9SPPA Ch. 29 - Prob. 10SPPA

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

Solution Summary: The author explains the effect of expansion on the U.S. real GDP and unemployment in the short run.

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

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Chapter 29 Solutions

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

Solution Summary: The author explains the effect of expansion on the U.S. real GDP and unemployment in the short run.

To explain: The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.

Want to see the full answer?

Chapter 29 Solutions

To explain:

The effect of expansion on the U.S real GDP and the unemployment in the short run when the U.S economy has a recessionary gap and the world economy goes into an expansion.