2. Use the accompanying table to answer the following questions. Year Real GDP (trillions of $) Potential Output (trillions of $) 2014 $17.11 $17.38 2015 $17.46 $17.69 2016 $17.78 $17.99 2017 $18.22 $18.29 2018 $18.77 $18.65 a. Calculate the output gap for each year. b. What does it mean when the output gap is negative? What does it mean when it is positive? c. For each year, calculate how much the output gap changed. Compare this to the growth rate of actual output that year, less the growth rate of potential output.

2. Use the accompanying table to answer the following questions. Year Real GDP (trillions of $) Potential Output (trillions of $) 2014 $17.11 $17.38 2015 $17.46 $17.69 2016 $17.78 $17.99 2017 $18.22 $18.29 2018 $18.77 $18.65 a. Calculate the output gap for each year. b. What does it mean when the output gap is negative? What does it mean when it is positive? c. For each year, calculate how much the output gap changed. Compare this to the growth rate of actual output that year, less the growth rate of potential output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

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2. Use the accompanying table to answer the following questions.
Year
Real GDP (trillions of $)
Potential Output (trillions of $)
2014
$17.11
$17.38
2015
$17.46
$17.69
2016
$17.78
$17.99
2017
$18.22
$18.29
2018
$18.77
$18.65
a. Calculate the output gap for each year.
b. What does it mean when the output gap is negative? What does it
mean when it is positive?
c. For each year, calculate how much the output gap changed.
Compare this to the growth rate of actual output that year, less the
growth rate of potential output.

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