Okun's Law equation, y = a + bx + e, reflects the relationship between a country'sgrowth rate (y) and unemployment rate change (x). The regression uses quarterlyseasonally-adjusted data covering a 10-year period to estimate the Okun's Lawequation coefficients, a and b. The regression results suggestRegression StatisticsMultiple RR SquareAdjusted R SquareStandard ErrorObservationsANOVARegressionResidualTotal.0.5816500240.3383177970.3265020442626981009df100SS1197 595615599386.4576539100 584.0532695Coefficients Standard ErrorIntercept0.301072098 0.345330555UnRateChange -5.665498514 1:058781687MS197.59561556.901029535t Stat0.871837414-5.350960053F28.63277349P-value0.3870197081.68197E-06Significance F168197E-06 a) a 1% increase of the unemployment rate change leads to a 5.67% decrease ofthe real GDP growth rate.b) a 1% increase of the unemployment rate change leads to a 1.68% decreaseof the real GDP growth rate.c) the relationship is not significantly different from zero.d) a 1% increase of the real GDP growth rate leads to a 1.68% increase of theunemployment rate change.O e) a 1% increase of the real GDP growth rate leads to a 5.67% decrease of theunemployment rate change.A

The functional form of Okun's law n regression equation y=a+bx+e Where x denotes unemployment rate…

a) a 1% increase of the unemployment rate change leads to a 5.67% decrease of the real GDP growth rate. b) a 1% increase of the unemployment rate change leads to a 1.68% decrease of the real GDP growth rate. c) the relationship is not significantly different from zero. d) a 1% increase of the real GDP growth rate leads to a 1.68% increase of the unemployment rate change. e) a 1% increase of the real GDP growth rate leads to a 5.67% decrease of the unemployment rate change.

a) a 1% increase of the unemployment rate change leads to a 5.67% decrease of the real GDP growth rate. b) a 1% increase of the unemployment rate change leads to a 1.68% decrease of the real GDP growth rate. c) the relationship is not significantly different from zero. d) a 1% increase of the real GDP growth rate leads to a 1.68% increase of the unemployment rate change. e) a 1% increase of the real GDP growth rate leads to a 5.67% decrease of the unemployment rate change.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

QUESTION 9 Is it possible for the unemployment rate to go down while the number of unemployed workers increases? Yes, if the labor force participation rate increases sufficiently Yes, if the working age population grows sufficiently No since unemployment is always bad for the economy Yes, if discouraged workers reenter the labor force to fill job openings in sufficient numbers No, any increase in the number of unemployed will result in an increase in the unemployment rate Yes, if the labor force participation rate decreases sufficiently
In a macroeconomy where textile and information technology are among the major industries, the natural rate of unemployment is 4%. Although workers prefer full-time jobs, all industries have a combination of full-time and part- time (underemployed) workers. In 2010, the total population was 14 million with an adult population of 12.2 million, and real output for the year was $350 billion. In the same year, 7.6 million people were employed, 1.5 million people were part-time workers, and 400,000 people were unemployed. Furthermore 300,000 individuals stated that they were discouraged from searching for a job. (Question 1 of 7) What was the real GDP per capita in 2010? (report your answer up to 2 decimal places)
Question 2 Consider the following model of the labour market: 60 = E; + Ut Ut+1 = Ut Ut + Et, 3 where E, denotes the number of employed persons (in period t) and U; denotes the number of unemployed persons (both measured in millions). a) Interpret the above equations and calculate steady-state unemployment. b) Assume the economy is initially in a steady state. Suppose that structural changes in the labour market result in the job-finding rate decreasing by half. Using an appropriate diagram, analyse and explain the impact on unemployment of this shock.
1. Examine the data on unemployment rate and Economic rate for country A and Country B i) Identify the relationship between economic growth and unemployment rate (if any positive, negative, no relationship) Use the data to justify your choice.
Country A has a population of 250 million. All of the citizens are over the age of 18. Moreover, 100 million citizens go to college and choose not to work. 20 million citizens are looking for jobs, but they cannot find one. The rest are employed. Which of the following statements is true? Choice 1 of 4:The Labor Force participation rate and the unemployment rate are equalChoice 2 of 4:None of these choices are trueChoice 3 of 4:The Labor Force participation rate is lower than the unemployment rateChoice 4 of 4:The Employment rate is 42%
In a macroeconomy where textile and information technology are among the major industries, the natural rate of unemployment is 5%. Although workers prefer full-time jobs, all industries have a combination of full-time and part- time (underemployed) workers. In 2010, the total population was 10 million with an adult population of 7.8 million, and real output for the year was $270 billion. In the same year, 4.5 million people were employed, 1.5 million people were part-time workers, and 300,000 people were unemployed. Furthermore 400,000 individuals stated that they were discouraged from searching for a job. (Question 1 of 7) What was the real GDP per capita in 2010? (report your answer up to 2 decimal places)
The BLS reported that in June 2019, the labor force was 163.0 million, employment was 157.0 million, and the working-age population was 259.1 million. The BLS also reported that 17.3 percent of all employment in June 2019 was part time and that 4.3 million people worked part time for economic reasons. How many people worked part time for noneconomic reasons?
Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. The table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment 3% Natural rate of unemployment 4% Population of the country 125 million Number of people employed 97 million Number of people unemployed 3 million Number of people employed part time 5 million Number of discouraged workers 2 million (c) Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain. (d) Calculate what the cyclical unemployment rate would be if the actual rate of unemployment increased to 5 percent. Show your work.
The expansion phase of the business cycle is typically associated with higher Multiple Choice income; real GDP real GDP; unemployment employment; income unemployment, output and lower
Bell-land's unemployment rate is 7.2%. The ruler of Bell-land ( a wonderful, wise middle-aged woman in a wheelchair) asks you whether this is a good rate and if it is an improvement? What is your answer? What are the issues that you need to think about before giving your answer? Explain your answer using the concepts learned in the module. Bell-land is not the same as the U.S.
Suppose that economy X is at the steady-state unemployment rate with a separation rate of 0.05 per month and a job-finding rate of 0.15 per month, and the labor force was 150 million, how many individuals would lose their jobs each month?
Is the price elasticity of demand affected by the nature of the commodity being necessary or unnecessary, explain by example? You Illustrate your answer!