A country reports a potential GDP of $6 trillion, a natural unemployment rate of 4 percent and an expected inflation rate of 2 percent. Using Okun's Law, if the unemployment rate is 5 percent, what is real GDP?
What will be an ideal response?
Real GDP = $5.88 trillion (= $6 trillion × 0.98).
You might also like to view...
If the Herfindahl-Hirschman Index for an industry is 8,528, is the industry competitive or concentrated?
What will be an ideal response?
In Japan, the market value of the land is approximately four times that of all the land in the United States, even though Japan is only about the size of California. The most likely explanation for this fact is
a. greater demand for land in Japan relative to the supply than in the United States. b. land is very productive in Japan. c. land is not fixed in supply in the United States. d. Japanese workers are very productive.
The primary value of real GDP is its ability to measure year to year changes in
What will be an ideal response?
The costs associated with the negotiation and enforcement of an agreement are
A) property costs.
B) resource factor costs.
C) transaction costs.
D) attorney fees.