Consider the data of a fictitious country in the following table: a. In both years, actual real

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Consider the data of a fictitious country in the following table:

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a. In both years, actual real GDP is lower than potential GDP. Briefly explain how this is possible.

b. The actual real GDP in 2021 is slightly higher than that in 2020, and the unemployment rate decreased from 2020 to 2021. Why?

c. Is the inflation rate likely to be higher in 2021 than it was in 2020? Is the economic crisis caused by the COVID-19 pandemic a result of a change in a component of aggregate demand or by a supply shock?

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Economics

ISBN: 9781292430645

8th Global Edition

Authors: R. Glenn Hubbard, Anthony P. O'Brien

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Question Posted: Mar 07, 2024 01:00 AM

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Consider the data of a fictitious country in the following table: a. In both years, actual real

Question:

Year 2020 2021 Actual Real GDP $20.93 trillion 21.50 trillion Potential GDP $21.60 trillion 22.67 trillion Unemployment Rate 6.9% 5.9

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Economics

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