The economy of Omega operates according to Okun's law. In Omega, potential GDP and real GDP both equal $7 trillion, and the natural rate of unemployment equals 6 percent. What is the actual rate of unemployment in Omega?
A. 13.0 percent
B. 4.2 percent
C. 6.0 percent
D. 7.0 percent
Answer: C
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By the end of the 1960s, many countries felt that they were importing inflation from
A) the United States. B) Germany. C) France. D) Japan. E) the United Kingdom.
In the macroeconomic model of aggregate supply and aggregate demand, quantity is:
A. represented by GDP. B. a measure of total output. C. the measure of the value of all goods and services produced by the economy. D. All of these are true.
When domestic production causes pollution that imposes an external cost on the country, the country may export the wrong products because
A. the price of the product should be lower, which could lead to less production of the product. B. the price of the product should be lower, which could lead to no exports of the product. C. the price of the product should be higher, which could lead to no exports of the product. D. the price of the product should be higher, which could lead to more exports of the product.
Today, in the United States, exports are about
A. 13 percent of GDP. B. 28 percent of GDP. C. 4 percent of GDP. D. 90 percent of GDP.