a) If a country's natural unemployment rate is 5.5 percent and its actual unemployment rate is 3.5 percent, what is its cyclical unemployment rate? ___________percent
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a) If a country's natural
Instructions: Enter the value for the output gap as an absolute number.
b) According to Okun's law, this country would have (Click to select) a recessionary an expansionary output gap of _________percent.
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- The rate of output and planned expenditures for the economy of Timbuktu are shown in the following table: Total Output Planned Aggregate Expenditures (Two-Sector Economy)(Real GDP in billion dollars) (in billions) 5,000 5,250 5,500 5,500 6,000 5,750 6,500 6,000 7,000…Consider starting from full-employment equilibrium in our Aggregate Demand and Supply model (with flexible wages and worker misperception of price level changes in the short run), at Po, QN on the output market graph below. Then we get an increase in Aggregate Demand from Agg Do to Agg D1. Group of answer choices a) In the long run, P will increase further above P1 as workers finally get a full cost of living raise. b) at P1, Q1, we are in a recessionary gap. c) In the long run, P and Q will return to their original levels when workers perceive the decrease in P. d) In the long run Q will increase further above Q1 as employment increases (due to workers getting wage increases). e) None of the other options.The rate of output and planned expenditures for the economy of timbuktu are shown in the following table: Total Output(Real GDP in Billion dollars) Planned Aggregate Expenditures (Two-sector Economy) (in billions) 5,000 5,250 5,500 5,500 6,000 5,750 6,500 6,000 7,000 6,250 a. If the economy's full employment rate of output is 6.0 trillion, what will happen to the unemployment rate assuming that it will persist into future? b. What would happen to the equilibrium level of output/income if there will be an autonomous increase in investment of 250 billion?
- Suppose the Farsighted Forecasting Group, an organization of private economists, predicts that the output gap will fall by 4 percent over the next year. According to Okun’s Law, by how much is the unemployment rate likely to rise?The economy of Country X has an actual unemployment rate that is less than the natural unemployment rate. a) Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves, and show each of the following: Current Price Level labeled PL1 Current Real Output labelled Y1 Full employment output labeled Yf b) Suppose that investment spending on plant and equipment increases. On your graph in part (a), show the effect of the increase in investment spending on the equilibrium price level and real output in the short run.Suppose the economy is self-regulating and the (actual) unemployment rate is less than the natural unemployment rate. This means that the economy is producing a level of output a. above its naturel level and will eventually cut back on output b. below its natural level and will eventually increase output c. below its natural level but no forces exist to automatically increase output d. above its natural level and institutional constraints will automatically be reduced so as to allow the economy to continue producing this level e. none of the above
- given the graph and The current target inflation rate in 8 percent. The natural rate of unemployment is 5 percent and Okun's alpha is 8. Suppose that investment spending by business firms increases causing the AD function to shift to the right by 3,000 units. what will the inflation rate be? what will short run real gdp be? what will cyclical unemployment be? what will overall unemployment be? what will the long term inflation rate be?True/False/Uncertain Unemployment can arise in an economy even when there is no imbalance between the number of available workers and number of available jobs; and there is no mismatch between the skills of available workers and skill requirements of available jobs. The long-run labor demand is more elastic than the short-run labor demand as firms can adjust both capital and labor in the long-run; and they can fully take advantage of changes in the price of labor. The answers should be very clear and detailed, THANK YOU!!!How long would it take for the price level to double if inflation persisted at the following percentages? 17.5 percent per year 35 percent per year 3.5 percent per year
- The structural unemployment rate is 1.3% and the frictional unemployment is 2.9%, and the economy's current unemployment rate is 4.2%. The economy is in: Group of answer choices full employment having reached the potential real GDP. a recessionary gap producing less than the potential real GDP. an inflationary gap having more unemployment than the natural unemployment. an inflationary gap having lower unemployment than the natural unemployment.Macropoland, a country that is a natural gas and oil importer, has a natural rate of unemployment (at the full employment level of GDP) that is about 4.5%, and the long run average rate of inflation over time has been about 2%. However, during the period 1973-1974, the country experienced an inflation rate of about 15% while simultaneously experiencing unemployment of nearly 13%.At the present time, Macropoland is experiencing very sluggish consumption and investment (a result of a fall in the housing market), and unemployment has again edged up to around 9%. Inflation is very low at 0.4%.Macropoland has just hired you as their economic advisor. You have a big job ahead of you. Using your knowledge of aggregate demand and aggregate supply, can you explain what happened in these two time periods?Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical…5 An economy experiences a decade in which the quarterly unemployment rate fluctuates between 2.5% and 3.5%. Due to a number of shocks the economy gets into problems and the unemployment rate increases by 0.5%-point per quarter (So it become 4.0% in Q1, 4.5% in Q2, 5% in Q3 and 5.5% in Q4, also in the second year after the shock the unemployment rate continues to increase. This experience is consistent with: a locally and globally stable equilibrium a locally and globally unstable equilibrium a locally unstable and globally stable equilibrium a locally stable and globally unstable equilibrium
