Change in unemployment rateAccording to following diagrams determine the sensitivity parameters ofOkun's and Phillips equations and a, and long run equilibrium GDPgrowth rate gy and natural rate of unemployment unAu, = 0(gr, - 9Y)An, = a(u, -un)Suppose that initial unemployment level u-1 of this country is 5%, andinitial inflation rate is ₁-1 is 4% and GDP grows gy, at 10% in a givenyear. What would be current unemployment u, and inflation , rates?1505005413Growth RateUnemployment rate is 6%, inflation rate is 6,4%Unemployment rate is 4%, inflation rate is 6,4%Unemployment rate is 6%, inflation rate is 4%Unemployment rate is 4%, inflation rate is 4%Unemployment rate is 8%, inflation rate is 4%9Nchange in inflation rate0~ To510unemployment rate20

Okun's Law is an empirical relationship between changes in the unemployment rate and real GDP. It…

According to following diagrams determine the sensitivity parameters of Okun's and Phillips equations and a, and long run equilibrium GDP growth rate gy and natural rate of unemployment u Au, = 0(gr, - gr) An, = a(u, -u₂) Change in unemployment rate Suppose that initial unemployment level u-1 of this country is 5%, and initial inflation rate is ₁-1 is 4% and GDP grows gr, at 10% in a given year. What would be current unemployment u, and inflation , rates? 2.7 05 O 4 05 1 Growth Rate Unemployment rate is 6%, inflation rate is 6,4% Unemployment rate is 4%, inflation rate is 6,4% Unemployment rate is 6%, inflation rate is 4% Unemployment rate is 4%, inflation rate is 4% Unemployment rate is 8%, inflation rate is 4% change in inflation rate 9 4 2 ONT s 10 15 unemployment rate 20

According to following diagrams determine the sensitivity parameters of Okun's and Phillips equations and a, and long run equilibrium GDP growth rate gy and natural rate of unemployment u Au, = 0(gr, - gr) An, = a(u, -u₂) Change in unemployment rate Suppose that initial unemployment level u-1 of this country is 5%, and initial inflation rate is ₁-1 is 4% and GDP grows gr, at 10% in a given year. What would be current unemployment u, and inflation , rates? 2.7 05 O 4 05 1 Growth Rate Unemployment rate is 6%, inflation rate is 6,4% Unemployment rate is 4%, inflation rate is 6,4% Unemployment rate is 6%, inflation rate is 4% Unemployment rate is 4%, inflation rate is 4% Unemployment rate is 8%, inflation rate is 4% change in inflation rate 9 4 2 ONT s 10 15 unemployment rate 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Change in unemployment rate
According to following diagrams determine the sensitivity parameters of
Okun's and Phillips equations and a, and long run equilibrium GDP
growth rate gy and natural rate of unemployment un
Au, = 0(gr, - 9Y)
An, = a(u, -un)
Suppose that initial unemployment level u-1 of this country is 5%, and
initial inflation rate is ₁-1 is 4% and GDP grows gy, at 10% in a given
year. What would be current unemployment u, and inflation , rates?
15
05
0
05
4
1
3
Growth Rate
Unemployment rate is 6%, inflation rate is 6,4%
Unemployment rate is 4%, inflation rate is 6,4%
Unemployment rate is 6%, inflation rate is 4%
Unemployment rate is 4%, inflation rate is 4%
Unemployment rate is 8%, inflation rate is 4%
9
N
change in inflation rate
0
~ T
o
5
10
unemployment rate
20

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