In Macroland potential output equals $100 trillion and the natural rate of unemployment is 5 88. percent. If the actual unemployment rate is 3 percent, then the output gap equals: A. -$4 trillion. B.-$2 trillion. -%$2 trillion.
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- 1. Another economy has the production Y = A * K^0.5 * L^0.5, the marginal product MPL = 0.5 * A * K^0.5 / L^0.5, in which K = 144 and the supply of labor w = 5 * EP/P *L^0.5 Productivity is A=50. In absence of shocks and policies, EP/P=1, the number of jobs is L = 60, and wage is w = 38.73. But now inflation is slower than expected, with EP/P=1.2. Find the new equilibrium number of workers. 2. Find the new equilibrium wage at EP/P=1.2 3. Graph the change in the labor market equilibrium. Mark the before and after equilibria with E0 and E1. Label axes and curves, map relevant values onto axes.Suppose the real GDP of an economy is $400 billion dollars and its unemployment rate is 6%.If the natural rate of unemployment is estimated at 3%, what is the value of the country’s potential GDP (LAS) in billions of dollars?Value of the country’s potential GDP (LAS) is $ billion. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.I just need assitance and a better understanding of 3 and mostly 4 1. Another economy has the production Y = A * K^0.5 * L^0.5, the marginal product MPL = 0.5 * A * K^0.5 / L^0.5, in which K = 144 and the supply of labor w = 5 * EP/P *L^0.5 Productivity is A=50. In absence of shocks and policies, EP/P=1, the number of jobs is L = 60, and wage is w = 38.73. But now inflation is slower than expected, with EP/P=1.2. Find the new equilibrium number of workers. 2. Find the new equilibrium wage at EP/P=1.2 3. Graph the change in the labor market equilibrium. Mark the before and after equilibria with E0 and E1. Label axes and curves, map relevant values onto axes. 4. Now let's consider this same scenario in terms of the accelerationist Phillips curve. The labor force is N=64. Find the rates of unemployment before and after as (N-L)/N and map them into our surprise inflation indexes, EP/P. Label the natural rate of unemployment, show the cyclical rate of unemployment. Step 1:…
- 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?a) Which of the following is not true? Frictional unemployment on the labor market arises from a lack of information in the labor market Cyclical unemployment exists because of a recession It is logically impossible for both the unemployment and the employment rates to both simultaneously increase or decrease together Structural unemployment exists because of mismatched worker skills and job availability Full employment requires that no cyclical unemployment exists on the labor market b) Suppose we have the following: (4th order) Value of trees $5 per tree and 1,000 tree harvested; (3rd order) 1,000 trees fabricated in to $25 wood pulp per ton (1,000 tons): (2nd order) 50,000 rolls of facial tissue ($10 each); (1st order consumer goods) of 30,000 boxes of Kleenex tissue at Safeway for $1 each. Which of the following it the correct calculation of GNP? $540,000 $400,000 $450,000 30,000 None of the above is correctThe PH debt as of today amounts 12 trillions. This balloons with an interest rate of 0.16% yearly. Suppose the government requires every earning individual to pay debt by 2030, how much of us would need to pay monthly (annual payment amortized in 12 equal payments), assuming that inflation is 3%, the interest rate is 5.6% compounded daily, and we will start the payment by the end of 2022? The Philippines is estimated to have 110 million people, with the work force around 20%. Note: Show the solution appropriately. Thankyou!
- c. According to the Keynesian theory, what would be the effect of the “A wave of investor and consumer pessimism about the future profitability of capital investments and lower future income” on output (Y), the real interest rate (r), employment (L) and the price level (P)? Distinguish between the short run and the long run effects by using the IS-LM-FE and AD-AS models and the effective labor demand theory.Title If someone could show me how to solve this IS-LM problem that would be very helpful. Thanks! Show tr Description If someone could show me how to solve this IS-LM problem that would be very helpful. Thanks! Show transcribed image text Desired consumption: C^d = 580 + [0.55 x (Y - T)] - 45r Desired investment: I^d = 430 - 40r Real money demand: L = 0.6 Y - 95i Full-employment output: Y = 2,210 Expected inflation pi^c : 0.03 In this economy the government always has a balanced budget, so T = G, where T is total taxes collected. a. Suppose that T = G = 150 and that M = 4,320. Use the classical IS-LM model to determine the equilibrium value of the real interest rate. (flint: In the classical model output always equals its full-employment level.) The equations are: The initial equilibrium values of output, real interest rate, consumption, investment and the price level were found to be: Output = 2,210 Real interest rate = 0.97 Consumption = 1,669.4 Investment = 391.2 Price…Assume inflation is 2% across both 2021 and 2022, the neutral real interest rate is 4% in 2021 and 3.5% in 2022, and the federal funds rate is 3% in 2021 and 4% in 2022. According to Okun’s Rule of Thumb, will the unemployment rate increase or decrease?
- 1. Please examine possible impacts of Covid-19 on unemployment both in the long-run and short-run perspectivesThe 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?Expected inflation is 3%, and initially the output gap is zero (percent). A(surprise) tariff reduction on imported steel and aluminum- which are used widely in domestic production-results in (unexpected) cost-push inflation of -0.5%. Imports rise, leading to (unexpected) demand-pull inflation of -0.25%. The economy's actual rate of inflation is: A. 2.25% B. 2.50% C. 2.75% D. 3.00% E. 3.75%