Suppose the trend growth is 3 percent and the economy is producing output at an annual rate of $5 trillion. Suppose also that the rate of unemployment changes from 8 percent to 5 percent. a. Using Okun's rule of thumb calculate the output after the unemployment change (show your calculations and explain) 4

Principles of Economics 2e
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Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
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Problem 44CTQ: The U.S. unemployment rate increased from 4.6 in July 2001 to 5.9 by June 2002. Without studying the...
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Suppose the trend growth is 3 percent and the economy is producing output at an
annual rate of $5 trillion. Suppose also that the rate of unemployment changes from
8 percent to 5 percent.
a. Using Okun's rule of thumb calculate the output after the unemployment change
(show your calculations and explain)
Transcribed Image Text:Suppose the trend growth is 3 percent and the economy is producing output at an annual rate of $5 trillion. Suppose also that the rate of unemployment changes from 8 percent to 5 percent. a. Using Okun's rule of thumb calculate the output after the unemployment change (show your calculations and explain)
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