EBK PRINCIPLES OF MACROECONOMICS
12th Edition
ISBN: 9780134079592
Author: Oster
Publisher: YUZU
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Question
Chapter 15, Problem 4.1P
Sub part (a):
To determine
GDP rate needed to decreases the
Sub part (b):
To determine
Unemployment rate and the annual GDP growth rate based on the Okun’s law.
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Chapter 15 Solutions
EBK PRINCIPLES OF MACROECONOMICS
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- The U.S. unemployment rate increased from 4.6% in July 2001 to 5.9% by June 2002. Without studying the subject in any detail, would you expect that a change of this kind is more likely to be due to cyclical unemployment or a change in the natural rate of unemployment? Why?arrow_forwardIn 1929 the US had an unemployment rate of approximately 3.2%, or 1.6 million people unemployed, yet most economists suggest we were at full employment. What do economists mean by "full employment"?arrow_forwardUsing the details listed below, respond to questions 1 and 2. Okun's Law, which outlines the connection between changes in the unemployment rate and real GDP growth, can be roughly summarised as follows: Real GDP Growth is equal to 3 - 2*changes in the unemployment rate. This relationship holds true for seasonal variations. In 2019 as a whole, the unemployment rate was 3.7% on average. In 2020, the average unemployment rate for the full year was 5.9%. 1. What is the rate of real GDP growth between 2019 and 2020 predicted by Okun's Law? Describe your response. 2. How does this forecast compare to the Real GDP growth rate that actually occurred between 2019 and 2020?arrow_forward
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- Suppose that in a population of 200 million persons, 150 million are in the labor force and 120 million are employed. Then the unemployment rate for this economy is: A) 20 percent B) 40 percent C) 60 percent D) 80 percentarrow_forwardAssume that in a country, the total labour force is 150,000 workers, and the total numbers of workers employed is 145,500. What is the unemployment rate in the economy?arrow_forwardExplain how an increase in the unemployment rate would impact how businesses will operate. Analyze how economic growth can be impacted by changes in the unemployment rate.arrow_forward
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