Question 2 (4 Points) Due to spread of COVID 19, majority of states in US have imposed some kind of lockdown. This has macroeconomic consequences. Let's explore some of them a.) (1 Point) According to estimates from Bureau of Labor Statistics, the non-farm unem ployment rate has increased from 3.5% to 4.4%. Given Okun's law what would be the change in output gap? Assume the output gap was 1% before the onset of this pandemic. What is the new level of output gap? b) (1 Point) Scarring effect is dened as the negative longterm effect that unemployment has on future labour market possibilities. Suppose this effect reduces the potential output of US from $20,000 billion to $18,000 billion. Due to government's stimulus plan, the actual GDP recovers to its old level of $21,000 billion. What is the change in the output gap? 0) (2 Points) Suppose the current account decit of US is $500 billion. The stimulus plan of US government reduces the government saving by $50 billion and recession causes the household savings to go down by $100 billion. The Investments, on the other hand, rise by $120. What would be net impact on current account decit