--%>
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 : Change in stock Why change in stock is

    Why change in stock is considered a portion of final expenditure? Answer: The Unsold stocks left with producers are supposed as purchased by the producers themselve

    		•
  • Q : The Fed can control the Fed funds rate

    Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have o

    		•
  • Q : Surplus of AD over AS-Inflationary gap

    Does a surplus of AD over AS always entail a condition of inflationary gap? Answer: No. Inflationary gap takes place only if AD > AS equivalent to full employmen

    		•
  • Q : Type of market when people cannot buy

    Whenever people can’t purchase all of a good they are willing and capable to pay for at present market price, there is surely a market: (1) Price ceiling. (2) Price floor. (3) Shortage. (4) Anomaly.  (5) Surplus. Please

    		•
  • Q : Utilization of Bond market to make and

    How does the FED utilize the bond market to make and destroy money? Which technique do developed countries utilize to decrease the chance of experiencing inflation? What about the Banana Republicans and inflation, do they have this means acessible to

    		•
  • Q : Value of fiscal deficit Evaluate the

    Evaluate the value of fiscal deficit when primary deficit is 53,000 crores and interest on borrowings is Rs 5,000 crores?

    		•
  • Q : Policy proposals influencing market for

    How would your policy proposals influence the market for parking?

    		•
  • Q : Fiscal measures to accurate

    Describe the fiscal measures to accurate the condition of deficient demand and excess demand. Answer: Fiscal measures are the government’s budgetary policy th

    		•
  • Q : What points out revenue deficit What

    What points out revenue deficit? Answer: Revenue deficits are stated as the surplus of revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Recei

    		•
  • Q : Internet technology in airline

    Speculate regarding the behavior which could result from Internet technology in airline transactions and propose 2 or more strategies to deal with them.

    		•