Suppose that the natural rate of unemployment in a particular year is 4 percent and the actual rate of unemployment is 7 percent. Instructions: Enter your answers as whole numbers. a. Use Okun's law to determine the size of the GDP gap in percentage-point terms. Percent b. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment? billion

Suppose that the natural rate of unemployment in a particular year is 4 percent and the actual rate of unemployment is 7 percent. Instructions: Enter your answers as whole numbers. a. Use Okun's law to determine the size of the GDP gap in percentage-point terms. Percent b. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment? billion

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 51CTQ: Suppose the level of structural unemployment increases. How would you illustrate the increase in...

See similar textbooks

Similar questions

Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual unemployment rate is 9 percent. Instructions: Enter your answers as a whole number. a. Use Okun's law to determine the size of the GDP gap in percentage-point terms. percent b. If potential GDP is $500 billion in that year, how much output is forgone because of cyclical unemployment? $1 billion
Suppose a market basket of goods and services costs $400 in the base 'year and the consumer price index (CPI) is currently 125. This indicates the price of the market basket of goods is now: $275. $425. $500. $525. Which of the following will most likely occur during the recessionary phase of a business cycle? O Real GDP nises, and the unemployment rate falls O Real GDP declines, and the rate of inflation nises O The sales of most businesses decline, and the unemployment rate nses Inflation rises, and employment population ratio falls
The figure below depicts the economy of Altrua, which is presently in equilibrium. Enter your responses below rounded to one decimal place. a. The size of its recessionary gap is $ .b. The size of this gap as a percentage of its actual GDP is %.c. If the natural rate of unemployment is 1%, use Okun’s law to calculate the amount of actual unemployment in Altrua. The actual rate of unemployment is %. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
Suppose real GDP in the country of Quarterville is currently $478075 and potential GDP is $430854. Which phase of the business cycle is Quarterville's economy most likely in? ORecession/Trough OExpansion/Peak
Google las a 99. In Macroland, a country that operates according to Okun's law, real GDP is $9.6 trillion, the actual rate of unemployment is 8 percent, and the natural unemployment rate is 6 percent. What is potential GDP in Macroland? A. $9.6 trillion B. $9.8 trillion C. $10.0 trillion
1.If the employment rate of output exceeds the planned aggreagte expenditure what will happen to the unemployment rate assuming that it will persist in the future?
What are the effects of an increase in preferences toward more leisure: The effect on real wages is ambiguous. Real wages go down. Real wages remain constant. O Real wages go up.
What is the quantity of real GDP produced if the real wage rate is at the full-employment equilibrium level? If the real wage rate is at the full-employment equilibrium level, real GDP is _______. A. at its highest attainable and efficient level B. equal to potential GDP, which is the most that can be produced C. at or below potential GDP depending on the level of employment D. equal to potential GDP, which is efficient but is not the most that can be produced
Assume that the sacrifice ratio in the Philippines is 3, the unemployment rate is at its natural level, and inflation is presently at 6%. Assume further that the target inflation rate of the Bangko Sentral ng Pilipinas (BSP) is 3%. a. If the BSP wants to bring down inflation to 3%, then GDP must go down by how much (%)? J b. Assuming that the Okun relationship in the Philippines is defined by the following equation: GDP growth = 4.241 1.234 x (change in unemployment) Thus, if inflation is initially at 6%, unemployment ought to rise by points if the BSP wants inflation to go down by 3 percentage points — nercentage
The outbreak of COVID-19 adversely attacks most economies. Some economists argue that the impacts on the macroeconomy mainly come from (i) the reduction in consumption and investment appetite, while others believe that the impacts mainly come from (ii) the immediate destruction of the supply-chain and production. Last Year This Year Annualized economic growth rate 4% -6% Unemployment rate 5% 8% Inflation rate 2% 5% Using an AD-AS model, explain whether argument (i) or (ii) above fits better to the case of Country X, and briefly discuss one plausible short-run dilemma facing the central bank of Country X.
How is long-term growth illustrated in an AD/AS model?
Suppose the Federal Reserve begins to Increase the supply of money at an Increasing rate. What Impact would that have on GDP, unemployment, and inflation?