The GDP gap, which can be either a positive or a negative value, is found by subtracting

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The GDP gap, which can be either a positive or a negative value, is found by subtracting potential GDP from actual GDP. The economic cost of unemployment, as measured by the GDP gap, consists of the goods and services forgone by society when its resources are involuntarily idle. Okun’s law suggests that every 1-percentage-point increase in unemployment above the natural rate causes an additional 2 percent negative GDP gap.

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Economics Principles Problems And Policies

ISBN: 9780073511443

19th Edition

Authors: Campbell Mcconnell ,Stanley Brue ,Sean Flynn

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