Determine the size of the gdp gap in percentage

Reference no: EM13189649

Suppose the natural rate of unemployment in 2005 is 5% and the actual rate of unemployment is 9%. Use Okun's law to determine the size of the GDP gap in percentage-point terms. If the potential GDP is $500B in that year, how much output is being forgone because of cyclical unemployment?

Reference no: EM13189649

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