--%>
Assignment Help - homework help

GDP gap

"The economic cost of unemployment is measured by the GDP gap." Explain this statement. ?

E

Expert

Verified

The GDP gap refers to the gap between current GDP and the GDP that corresponds to full employment level. The latter is also called the ‘potential GDP’. When there is unemployment the economy is unable to produce at potential level and the shortfall is the cost that the economy pays in economic terms. This is the cost in economic terms as it is the ’economy’s’ loss. There are other costs of unemployment, but they are personal and restricted to the unemployed person and his family.

   Related Questions in Macroeconomics

  • Q : Market Supply versus Individual Supply

    What is the basic difference between Market Supply and Individual Supply?

    		•
  • Q : Important issues in Macroeconomics to

    Macroeconomics is primarily focused on issues about: (w) economy extensive aggregate variables as like national income. (x) the structure of economic activity quite than its level. (y) resource allocations through households and business firms. (z) po

    		•
  • Q : Okuns law Describe Okun's law ? Give an

    Describe Okun's law? Give an illustration of how it works.

    		•
  • Q : Define revenue receipts Define revenue

    Define revenue receipts. Write the groups in which they are categorized. Answer: Any receipts that do not either make a liability or lead to reduction in assets is

    		•
  • Q : POSSIBILITIES Possibilities Food

    Possibilities Food (millions of tons per year) Tractors (millions per year) A 0 30 B 4 28 C 8 24 D 12 20 E 16 14 F 20 8 G 24 0 a. Is it possible for this nation to produce thirty million tons of food per year? Why or why not. b. Is it possible for this nation to produce thirty million

    		•
  • Q : Signals that guide economic decisions

    In market economies, what are the signals which guide economic decisions?

    		•
  • Q : Analyzing number of event that

    How can we analyze the number of event that influences the market?

    		•
  • Q : Agency function of Commercial Bank Name

    Name the six agency function of Commercial Bank. Answer: A) Transfer of funds B) Collection of funds C) Purchase and sale of securities. D) Collection of dividends E) Payment of bills &

    		•
  • Q : State the Income Effect Can someone

    Can someone please help me in finding out the accurate answer from the following question. The Income effects are: (i) Adjustments people make since the purchasing power of the given income is modified whenever prices change. (ii) Adjustments people make since the pur

    		•
  • Q : Meaning of SWOT Analysis SWOT Analysis

    SWOT Analysis: SWOT analysis is a powerful tool to know the strengths, weaknesses, opportunities and threats for any company. The company itself does SWOT analysis so as to know where they are standing vis-a-vis their competitors and what are the area

    		•