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Suppose that the natural rate of unemployment in a particular year is 6 percent and the actual rate of unemployment is 9 percent. Instructions: Enter
Suppose that the natural rate of unemployment in a particular year is 6 percent and the actual rate of unemployment is 9 percent. Instructions: Enter your answers as whole numbers.
a. Use Okuns law to determine the size of the GDP gap in percentage-point terms. __ percent.
b. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment? $ __billion.
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