The table below shows real GDP,potential GDP and the unemployment rate for a hypothetical economy. TABLE 30-3 Refer to Table 30-3.In which years is this economy operating at full employment?

Question

The table below shows real GDP,potential GDP and the unemployment rate for a hypothetical economy.  TABLE 30-3 Refer to Table 30-3.In which years is this economy operating at full employment?

Quizplus · Accepted Answer

The economy is operating at full employment when the unemployment rate equals the natural rate of unemployment. In this case, the natural rate of unemployment is estimated to be 5%. When the unemployment rate is equal to 5%, the economy is at full employment. According to the table, the unemployment rate is 5% in both 2011 and 2015, indicating that the economy is operating at full employment in those years.

The Table Below Shows Real GDP,potential GDP and the Unemployment