Suppose potential GDP is $100 billion and the natural unemployment rate is 5 percent. If the unemployment rate is 6 percent, then according to Okun's Law real GDP is
A) $102 billion. B) $98 billion. C) $101 billion. D) $99 billion. E) $100 billion.
B
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Suppose the United States decides to go back on the gold standard. This should
A) improve the Federal Reserve's ability to target inflation. B) decrease the Federal Reserve's ability to pursue active monetary policy. C) increase the effectiveness of expansionary monetary policy. D) increase the effectiveness of contractionary monetary policy.
Bob goes to his favorite hot dog stand, which is offering one hot dog for $2.50 or two for $4.00. Bob’s marginal cost of a second hot dog is
A. $1.00. B. $2.00. C. $1.50. D. $2.50.
Explain how various components work together in the decision-making process of the free market system.
What will be an ideal response?
The data collected by the Bureau of Labor Statistics have been criticized because
A. part-time workers are not counted in the number of workers employed. B. discouraged workers are treated as part of the labor force. C. some workers who are not looking for work are included in the labor force. D. millions of people with make-work jobs are counted as employed.