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What type of output gap is this economy in

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Reference no: EM132600975

Consider an economy where current output is $7,840, but long-run potential output is $8000. The current unemployment rate is 6%.

a) Using Okun's Law, what is the "natural" rate of unemployment in this economy? What is cyclical unemployment when current output is $7,840? (Show your work)

b) What type of "output gap" is this economy in?

Reference no: EM132600975

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