Reference no: EM131398824

As you know, over the past couple of weeks of class, we've argued that the U.S. economy's GDP is currently at (or near)  its potential level of output.  If so, then, as you also know, the U.S. economy's actual unemployment rate equals (or is near)  its long-run Natural Unemployment rate.  But are both of these statements true?

Take a look at the recent Washington Post piece on this very topic.

https://www.washingtonpost.com/posteverything/wp/2017/02/09/three-reasons-were-not-yet-at-full-employment/?utm_term=.dc36bcf4849b

So in your primary post this week, first, provide a ranking by order of importance ("1" is the highest; "3" is the lowest) of each of three reasons given why the U.S. economy is not at its full-employment GDP. And defend your ranking.

Next, given the author's arguments and your expanding knowledge of macroeconomics, what counterargument(s) might you advance in support of the claim that current U.S. GDP is also its potential GDP?  

Finally, make your case as to who's right?  And then state whether or not you think the Federal Reserve (the U.S. central bank) should continue on its present course to raise interest rates gradually so as to counter the widely held belief that a rising price level, i.e., inflation, lies just around the corner?  Make sure to explain your answer.