Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 11 percent. Use Okun's law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is forgone because of cyclical unemployment? Instructions: Enter whole numbers for your answers below. GDP gap=% Forgone output = $ billion

Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 11 percent. Use Okun's law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is forgone because of cyclical unemployment? Instructions: Enter whole numbers for your answers below. GDP gap=% Forgone output = $ billion

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter6: How Statisticians Measure Inflation

Section: Chapter Questions

Problem 3TY

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