Assuming okuns law what is the output gap in 2020 -nbsp if


Suppose potential output grows 2 percent per year and the natural rate of unemployment is constant at 6 percent. In 2020, the unemployment rate is 7 percent.

a. Assuming Okun's law, what is the output gap in 2020?

b. If output grows 5 percent from 2020 to 2021, what is the unemployment rate in 2021?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Assuming okuns law what is the output gap in 2020 -nbsp if
Reference No:- TGS01605262

Expected delivery within 24 Hours