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 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

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 13SCQ: Suppose the Federal Reserve begins to Increase the supply of money at an Increasing rate. What...

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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
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
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
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
The macroeconomy is depicted by the graph to the right 160- a. The current equilibrium price level and output level respectively are: 80 and $ 10 trillion. (Enter your responses as a whole numbers.) LRAS 140- b. The full employment level of GDP is SRAS O A. $10 trillion since the LRAS is defined at this point. 120- O B. unknown since no information was provided about the labor market. 100- O C. $10 trillion now but thereafter it depends on what the aggregate demand curve does. O D. $10 trillion now but it depends on the SRAS curve. 80- 60- AD 40- 10 12 14 16 18 20 Real GDP ($ trillions) Price level
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
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?
How is long-term growth illustrated in an AD/AS model?
In an economy, potential GDP is $20 trillion and the natural unemployment rate is 4 percent. If the unemployment rate rises to 6 percent, what is the value of real GDP predicted by Okun's Law? Real GDP is _______. A. $20.4 trillion B. $19.6 trillion C. $20.8 trillion D. $19.2 trillion
Congratulationst You have been appointed an economic policy adviser to the United States, You are told that the economy is significantly abowe futtemplyoment GDP. Based on this inlormation, how can the economy would adjust to reach LR.SR Equilbrium (Classical View)? The economy wilt experience low unemployment rate, pushing wages up, and increasing the pelces of a key input (labor). shatting the sAS to the left (up). The economy will experience high unemployment rate, pushing wages down, and reducing the prices of a key input (labor). shiting the SAS to the right (down). The econoriny wil experience low unemployment rate, decreasing inceme, which will eventually shift the AD to the left. The eooncmy will experience low unemployment rate, pushing wages up, and increasing the prices of a key input (labor), shiting the sAs to the night (down).
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
potiental output is $2500 if that important im not sure. and for current gdp i got 3000 | = 125; G = 75; X = 20; M = 30; a = 110; mpc = .9 4. What would the level of government spending have to be in order for GDP to be at the full employment level?