KEY QUESTION Assume that in a particular year the natural rate of unemployment is 5 percent and

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KEY QUESTION Assume that in a particular year the natural rate of unemployment is 5 percent and the actual rate of unemployment is 9 percent. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500 billion in that year, how much output is being forgone because of cyclical unemployment?

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Economics

ISBN: 9780073336947

17th Edition

Authors: Campbell McConnell , Stanley Brue

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