The following data is given in the table: GDP, billions of Year Unemployment dollars rate, % 2015 4125 2016 3712,5 In 2015 the unemployment rate was equal to the NAIRU. a. Calculate the GDP gap for 2016 (in absolute value and in percent). Determine whether it's a recessionary or inflationary gap. Explain why? b. What was the actual unemployment rate in 2016? Show computations. Okun's coefficient is 3.

The following data is given in the table: GDP, billions of Year Unemployment dollars rate, % 2015 4125 2016 3712,5 In 2015 the unemployment rate was equal to the NAIRU. a. Calculate the GDP gap for 2016 (in absolute value and in percent). Determine whether it's a recessionary or inflationary gap. Explain why? b. What was the actual unemployment rate in 2016? Show computations. Okun's coefficient is 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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