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 unemployment3%Natural rate of unemployment4%Population of the country125 millionNumber of people employed97 millionNumber of people unemployed3 millionNumber of people employed part time5 millionNumber of discouraged workers2 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 natural rate of unemployment is combined structural and frictional unemployment that persists in…

Answered: Include correctly labeled diagrams, if…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.

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