Ask Question
8 March, 13:36

A country's current unemployment rate is 11 percent. economists estimate that its natural rate of unemployment is 6 percent. about how large is this economy's negative gdp gap?

+2
Answers (1)
  1. 8 March, 15:22
    0
    To find the GDP (gross domestic product) gap you will take the actual unemployment rate and subtract it from the natural rate. Next you will multiply that by - 2 to find the economy's negative GDP gap.

    Okun's law states there is a - 2% GDP gap for every - 1% that the natural rate exceeds the current rate.

    Following this equation:

    (actual unemployment rate - natural unemployment rate) (-2) = GDP gap

    (11-6) (-2) = 10%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A country's current unemployment rate is 11 percent. economists estimate that its natural rate of unemployment is 6 percent. about how ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers