Suppose the natural rate of unemployment is 5%, with full-employment output of $7000 billion. Use Okun's Law to calculate the level of national output if the unemployment rate is 7%
What will be an ideal response?
The output-level form of Okun's law tells us that the percentage deviation of output from full-employment output equals minus two times the deviation of unemployment from the natural rate of unemployment. So, if the unemployment rate is 2 percentage points above the natural rate of unemployment, then output will be 4 percentage points below the full-employment level of output. So output will be (1 - 0.04 ) × $7000 billion = $6720 billion.
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A. Value today of future payments adjusted for inflation. B. Value today of future payments adjusted for interest accrual. C. Value today of future payments adjusted for risk. D. Future value of today's dollars.
In 2014, which of the following countries had the highest ratio of exports to GDP?
A) Germany B) Netherlands C) Japan D) United States E) Austria
Based on most observations, what are the effects on government budgets from the national health care program?
A) Tax revenues will not flow into the new program immediately. B) The federal government ultimately will have to search for ways to reduce its health care expenditures. C) Federal government expenditures on the program are being phased in immediately. D) the federal government ultimately will lower taxes since the program's cost will decline over time.
If the supply curve for orange juice is estimated to be Q = 40 + 2p, then, at a price of $2, the price elasticity of supply is
A) .01. B) .09. C) 1. D) 11.