Question

Suppose the real GDP of an economy is $560 billion dollars and
its unemployment rate is 6%.

If the natural rate of unemployment is estimated at 4%, what is the
value of the country’s potential GDP (LAS) in billions of dollars?
Enter your response below rounded to 1 decimal place.

Value of the country’s potential GDP (LAS) is ____$ billion.

Answer #1

Ans: $583.3 billion

**Explanation:**

According to Okun's law:

2(Unemployment rate - Natural rate of unemployment) = [(Potential GDP - Actual GDP) / Potential GDP] * 100%

2(6% - 4%) = [(Potential GDP - 560) / Potential GDP] * 100%

4% = [(Potential GDP - 560) / Potential GDP] * 100%

(Potential GDP - 560) / Potential GDP = 4% / 100% = 0.04

Potential GDP - 560 = 0.04Potential GDP

Potential GDP - 0.04Potential GDP = 560

0.96Potential GDP = 560

Potential GDP = 560 / 0.96 = **$583.3 billion**

Suppose potential GDP is $5,000 billion. Use the data below to
graph the aggregate demand curve.
Inflation (percent) 5 4 3 2 1
Real GDP (billions of dollars) 4800 4900 5000 5100 5200
1.Suppose the current inflation rate is 2 percent. Draw the
inflation adjustment line. What is the current value of real
GDP?
2.In the long run, what will the inflation rate be if economic
policy does not change? Explain how this adjustment takes
place.

Suppose that real GDP is currently
$13.22
trillion and potential real GDP is $14.0 trillion, or a gap
of
$800800
billion. The government purchases multiplier
LOADING...
is
3.33.3,
and the tax multiplier is
2.32.3.
Holding other factors constant, by how much will government
purchases need to be increased to bring the economy to equilibrium
at potential GDP?
Government spending will need to be increased by ------ billion.
(Enter your response rounded to the nearest wholenumber.)

1- In Beyonceland, real GDP fell continuously from $200 billion
in 2015 to $160 billion in 2016. Potential GDP remained constant at
$180 billion. Between 2015 and 2016, Beyonceland
A) went from a peak to a trough.
B) had a contraction and a recession.
C) went from a deflationary gap to an inflationary gap.
D) went from a negative output gap to a positive output gap.
E) had a growth rate of -25 percent.
2-
Which factor, if included in...

The AD/AS model shows _____ unemployment by how close the
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frictional natural structural In the Keynesian Zone, the economy is
likely in a _____ and real GDP is _____ potential GDP. Group of
answer choices growth period; close to recession; well below

20)
Suppose that the natural rate of unemployment in a particular
year is 6 percent and the actual rate of unemployment is 11
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. b. If the potential GDP is $500 billion in that year, how
much output is being forgone because of cyclical unemployment?

In the fourth quarter of 2001, economic statistics showed the
following:
Real GDP: $10,994.3 billion
Unemployment rate: 6.4%
Inflation rate : 1.5%
The conceptual variables corresponding to these data are:
Potential output: %11,144.6 billion
Natural rate of unemployment: 5.2%
Ideal inflation rate: 2.0%
a) Calculate the output gap.
b) Calculate the unemployment gap.
c) Calculate the inflation gap.
d) Calculate the output loss and inflation loss.
e) Calculate the total loss in the fourth quarter of 2001 if the
relative...

suppose that due to the corona virus shutdown US real gdp is 250
billion below potential GDP. An estimate for the saving multiplier
is .25. enter your answers two decimal places.
if the government wanted to close the gap by changing spending,
it would need to increase spending by ____ billion
if the government wanted to close the gap by changing taxes, it
would need to decrease taxes by ____ billion

11 . The response of the self-regulating economy The economy of
Langoria is currently in a state of long-run equilibrium in which
the economy is producing at its Natural Real GDP. The level of Real
GDP is currently 6 trillion dollars, and the price level is 115.
Changes in a Self-Regulating Economy 0 2 4 6 8 10 12 14 16 140 135
130 125 120 115 110 105 100 PRICE LEVEL REAL GDP (Trillions of
dollars) AD 2 AD...

Suppose that each 0.1-percentage-point increase in the
equilibrium interest rate induces a
$3
billion decrease in real planned investment spending by
businesses. In addition, the investment multiplier is equal to
4,
and the money multiplier is equal to
4
Furthermore, every
$9
billion decrease in the money supply brings about a
0.1-percentage-point increase in the equilibrium interest rate. Use
this information to answer the following questions under the
assumption that all other things are equal.
Calculate by how much the...

Suppose the economy is in long run equilibrium, with real GDP at
$19 trillion and the unemployment rate at 5%. now assume that the
central bank unexpectedly decreases the money supply by 6%. A.
Illustrate the short run effects on the macroeconomy by using the
aggregate demand-aggregate supply model. Be sure to indicate the
direction of change in real GDP, the price level and the
unemployment rate B. Illustrate the long run effects on the
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