Unemployment and population figures from fictitious country Fiestaland (all figures in 1000s):

Employed in full-time jobs

432

Employed in part-time jobs

124

Unemployed, actively searching for work

43

Unemployed, NOT actively searching for work (discouraged)

16

Total Population

1186

Assume that thenaturalrateofunemploymentinFiestaland is 5percent.

a)What is the size of the work force in Fiestaland?

b)What is theunemploymentrateinFiestaland?

c)AccordingtoOkun'slaw,what istheGDPgapasapercentageofpotentialGDP? Clearly indicate whether this is a recessionary, negative output gap or an inflationary, positive output gap.