4. Suppose that Okun's law can be described by the follOwIng ey Y-Y* — -3(и — и") Y* %3D Where u is the unemployment rate, u* is the natural rate of unemployment, Y is the GDP, and Y* is the potential GDP. Suppose that u = 5%. Calculate the GDP gap if u = 5.4%. Calculate the potential GDP if Y The job losing rate is 2.0%, and the job-finding rate is 45%. Find the unemployment rate in the next month, knowing that the labour force (LF) totals 1,000? Calculate the employment rate (e) and the total working-age population (15-64 Years), if the labour force participation rate (If) is equal to 76%. = 12,000
4. Suppose that Okun's law can be described by the follOwIng ey Y-Y* — -3(и — и") Y* %3D Where u is the unemployment rate, u* is the natural rate of unemployment, Y is the GDP, and Y* is the potential GDP. Suppose that u = 5%. Calculate the GDP gap if u = 5.4%. Calculate the potential GDP if Y The job losing rate is 2.0%, and the job-finding rate is 45%. Find the unemployment rate in the next month, knowing that the labour force (LF) totals 1,000? Calculate the employment rate (e) and the total working-age population (15-64 Years), if the labour force participation rate (If) is equal to 76%. = 12,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:4. Suppose that Okun's law can be described by the following equation:
Y-Y*
= -3(u – u*)
Y*
Where u is the unemployment rate, u* is the natural rate of unemployment, Y is the
GDP, and Y* is the potential GDP. Suppose that u
5%.
Calculate the GDP
Calculate the poténtial GDP if Y
The job losing rate is 2.0%, and the job-finding rate is 45%. Find the
unemployment rate in the next month, knowing that the labour force (LF) totals
1,000?
Calculate the employment rate (e) and the total working-age population (15-64
Years), if the labour force participation rate (If) is equal to 76%.
gap
if u = 5.4%.
= 12,000
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