Kindly answer questions 2,3,4,5,6
6. If the natural rate of unemployment is 5 percent, what to see its profits reduced the least? Explain. (LO]) is the total rate of unemployment if output is 2 percent 3. Define potential output. Is it possible for an economy below potential output? What if output is 2 percent to produce an amount greater than potential output? above potential output? (LO4) Explain. (LO2) O PROBLEMS O connect 1. Using Table 10.1, find the average duration, the minimum duration, and the maxi- mum duration of expansions in the United States since 1929. Are expansions getting ECONOMICS longer or shorter on average over time? Is there any tendency for long expansions to be followed by long recessions? (LOI) 2. From the homepage of the Bureau of Economic Analysis (www.bea.gov) obtain Study quarterly data for U.S. real GDP from three recessions: 1981-1982, 1990-1991, and Econ 2001. (LOT) a. How many quarters of negative real GDP growth occurred in each recession? McGraw-Hill b. Which, if any. of the recessions satisfied the informal criterion that a recession Visit your mobile app must have two consecutive quarters of negative GDP growth? store and download the Frank: Study 3. Given below are data on real GDP and potential GDP for the United States for the Econ app today! years 2000-2013, in billions of 2009 dollars. For each year, calculate the output gap ANSWER TO CONCEPT CHECK as a percentage of potential GDP and state whether the gap is a recessionary gap or an expansionary gap. Also calculate the year-to-year growth rates of real GDP. Identify the recessions that occurred during this period? (LO2) Year Real GDP Potential GDP 2003 13,271.1 13,520.3 2004 13,773.5 13.874.2 2005 14.234.2 14,203.6 2006 14,613.8 14.540.5 2007 14,873.7 14,890.2 2008 14.830.4 15,225.9 2009 14.418.7 15,495.4 2010 14,783.8 15,706.1 2011 15.020.6 15,922.3 2012 15,369.2 16,168.2 2013 15,710.3 16.431.4 SOURCE: Potential GDP. Federal Reserve Bank of St. Louis; real GDP. www.bea.gov. . From the homepage of the Bureau of Labor Statistics (www.bls.gov), obtain the most recent available data on the unemployment rate for workers aged 16-19 and workers aged 20 or over. How do they differ? What are some of the reasons for the difference? How does this difference relate to the decline in the overall natural rate of unemployment since 19807 (LO3) 5. Using Okun's law, fill in the four pieces of missing data in the table below. The data are hypothetical. (LO4) Real Potential Natural Actual GDP GDP unemployment unemployment Year ($ billions) ($ billions) rate (%) rate (%) 2012 7,840 8,000 (a) 6 2013 8,100 (b) 5 2014 (c) 8,200 1.5 2015 8.415 8.250 5 6. Of the following, identify the incorrect statement. (LOS) a. Output gaps are caused by inflationary pressures generated by the unintended side effects of government policy. b. Low aggregate spending can make output fall below potential output. c. When spending is high, output may rise above potential output. d. Government policies can help to eliminate output gaps
