Okun's Law is written as (u-u(-1)=-0.4left(g_{Y}-3 %ight)) a. What is the sign of (u-u(-1)) in a recession?

Question:

Okun's Law is written as $u-u(-1)=-0.4\left(g_{Y}-3 \%ight)$

a. What is the sign of $u-u(-1)$ in a recession? What is the sign of $u-u(-1)$ in a recovery?

b. Explain where the $3 \%$ number comes from?

c. Explain why the coefficient on the term $\left(g_{Y}-3 \%ight)$ is -0.4 and not -1 .

d. Suppose the number of immigrants per year allowed to enter the United States is sharply increased. How would Okun's law change?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Macroeconomics

ISBN: 9781292160504

7th Global Edition

Authors: Olivier J. Blanchard

See More Books

Question Posted: Feb 29, 2024 03:01 AM

See More Questions

Give Diagnosis in Detail: Penny is an African-American girl who was referred to a doctor for lethargy and pale skin. Penny is breastfed and takes infant formula with iron and is eating foods like...
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
Let A, B be sets. Define: (a) the Cartesian product (A B) (b) the set of relations R between A and B (c) the identity relation A on the set A [3 marks] Suppose S, T are relations between A and B, and...
(a) Find the Laplace transform of the voltage shown in Fig. 16.52(a). (b) Using that value of vs (t) in the circuit shown in Fig. 16.52(b), find the value of v0 (t). v,(0) 3 V 0 1s al 112
In 2015, for a taxpayer with $50,000 of taxable income, without doing any actual computations, which filing status do you expect to provide the lowest tax liability? Which filing status provides the...
Deines Corporation has fixed costs of $480,000. It has a unit selling price of $6, unit variable costs of $4.40, and a target net income of $1,500,000. Compute the required sales in units to achieve...
Why have standard setters designated fair value as the fundamental basis for recording a business combination?
The following selected financial data pertain to four unidentified companies: This financial information pertains to the following companies: a. Cable TV company b. Grocery store c. Accounting firm...
Earnings per Share E 8. During 2011, Arthur Corporation reported a net income of $3,059,000. On January 1, Arthur had 2,800,000 shares of common stock outstanding. The company issued an additional...
Fiscal consolidation at the Zero Lower Bound Suppose the economy is operating at the zero lower bound for the nominal policy rate; there is a large government deficit and the economy is operating at...
A shock to aggregate supply will also have different outcomes when there are different assumptions about the formation of the level of expected inflation. As in Question 3, one path assumes that the...
Given a weighted, directed graph G = (V, E) with no negative-weight cycles, let m be the maximum over all pairs of vertices u, v V of the minimum number of edges in a shortest path from u to v....
2 4 . In the current year, Madison sold Section 1 2 4 5 property for $ 6 , 0 0 0 . The property cost $ 2 6 , 0 0 0 when it was purchased 5 years ago. The depreciation claimed on the property was $ 2...
Swifty Company purchased machinery on January 1, 2025, for $82,400. The machinery is estimated to have a salvage value of $8,240 after a useful life of 8 years. (a) Your answer is incorrect. Compute...
Currently, the unit selling price is $ 5 0 , the variable cost is $ 3 4 , and the total fixed costs are $ 1 0 8 , 0 0 0 . a . Compute the current break - even sales in units.
(1) The Mean Value Theorem states: Let f be continuous over the closed [a, b] and differentiable over the open interval (a, b). Then, there exists at least one point c E (a, b) such that: f(b) - f(a)...
Assume you are an Israeli investor; the symbol for the Israeli currency, the shekel, is ILS. You see that stock for Top Image has a bid price of ILS 17 and an ask price of ILS 19 in Israel, a bid...
A 15-year loan requires month-end payments of $587.33 including interest at 8.4% compounded monthly. a. What was the original amount of the loan? b. What is the balance on the loan after half of the...
Use of the contraceptive Depo Provera appears to triple women's risk of infection with chlamydia and gonorrhea , a study reports today. An estimated 20 million to 30 million women worldwide use Depo...
Two countries start with equal GDPs. The economy of Country A grows at an annual rate of 3 percent while the economy of Country B grows at an annual rate of 4 percent. After 25 years, how much larger...
Most economists believe that from 2000 to 2003, actual GDP in the United States grew slower than potential GDP. What, then, should have happened to the unemployment rate over those three years? Then,...
Country A and Country B have identical population growth rates of 1 percent per annum, and everyone in each country always works 40 hours per week. Labor productivity grows at a rate of 2 percent in...
1,600 Balance Sheet The following is a list (in random order) of KIP International Products Company's December 31, 2019, balance sheet accounts: Additional Paid-In Capital on Preferred Stock $2,000...
Question 3 4 pts 9 x + 3 x 9 if x 0 Find a) lim f(x), b) lim, f(x), C), lim , f(x) if they exist. 3 Edit View Insert Format Tools Table : 12pt M Paragraph B IV A2 Tv
Mr. Geoffrey Guo had a variety of transactions during the 2019 year. Determine the total taxable capital gains included in Mr. Guo's division B income. The transactions included: 1. On January 1,...

Okun's Law is written as (u-u(-1)=-0.4left(g_{Y}-3 %ight)) a. What is the sign of (u-u(-1)) in a recession?

Question:

Step by Step Answer:

Macroeconomics

Students also viewed these Business questions