Question

What is potential output and how is it related to the natural rate
of unemployment? Is every resource being used to produce the
potential level of output? Explain.

Answer #1

When the unemployment rate is equal to its natural rate—that is,
no cyclical unemployment exists—the output level produced in the
economy is:
a. below full-employment output.
b. at full-employment output.
c. always decreasing.
d. always increasing.
e. above full-employment output.

When the economy is producing at an output level below the
potential output,
the unemployment rate is above the natural rate of
unemployment.
the short-run aggregate supply curve will slowly shift to the
left when wages start to adjust.
the intersection of the short-run aggregate supply curve and the
aggregate demand curve is to the right of the long-run aggregate
supply curve.
the economy might be at the long-run equilibrium.
Which of the following is not a determinant of the...

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 2008, the unemployment rate (u) was ten
percent, and the natural rate of unemployment
(nru) was six percent.
Again using Okun's Law, what was the percentage GDP gap then?
Show your computation. (ii) State your answer in
words, comparing actual to potential output. (iii)
What is the sign of the GDP gap then? (iv) Why is
the sign of the GDP gap in 2008 the opposite of the sign of the
current GDP gap? Explain.

1. Suppose Country A’s potential (or natural) output level is
$10B. In 2017, the expected price levelwas150, the actual price
level was 140, and the actual output was $8B. Determine α.
2. In 2018, the expected price level was 140, and the actual
output was $12B. Find the actual price level in 2018.
3. Suppose Country A’s natural rate of unemployment is 5%. In
2017, the actual unemployment rate was 7%, the actual inflation
rate was 1%, and the expected...

Suppose the natural rate of unemployment is 5%, with
full-employment output of $7000. Use Okun's Law to calculate the
level of national output if the employment rate is 7%.

A year ago, the unemployment rate
(u) was 3.6 percent, and the
natural rate of unemployment
(nru) was 4.6 percent.
(1 point)
(i) Again using Okun's Law,
what was the percentage GDP gap then? Show your computation.
(ii) State your answer in
words, comparing actual to potential output.
(iii) What is the sign of the
GDP gap then?
(iv) Why is the sign of the
GDP gap a year ago the opposite of the sign of the current GDP gap?...

List and explain the types of unemployment. What is the natural
rate of unemployment?

If the natural rate of unemployment is at 5% and current
unemployment is at 2% what fiscal policy(s) would be used? Why?

Fully describe the concept of the natural rate of
unemployment. How is it measured? Is the current unemployment rate
as measured by the Bureau of Labor and statistics above or below
the natural rate of unemployment?If the unemployment rate is above
the natural rate what does that mean and if below the natural rate
what does that mean?

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