You are given the following information about the economy. The natural rate of unemployment is 0.04,Okun's Law is that ( - Y)/ = 2(u - ),and the Phillips curve relationship is π = π^e - 2 (u - 0.04).
(a)What was the full-employment level of output in each year?
(b)Calculate the growth rate of full-employment output each year.
(c)If expected inflation was 0.04 for all four years,what was the inflation rate each year?

Question

You are given the following information about the economy.

The natural rate of unemployment is 0.04,Okun's Law is that (

- Y)/

= 2(u -

),and the Phillips curve relationship is π = π^e - 2 (u - 0.04).
(a)What was the full-employment level of output in each year?
(b)Calculate the growth rate of full-employment output each year.
(c)If expected inflation was 0.04 for all four years,what was the inflation rate each year?

Quizplus · Accepted Answer

The Answer of You are given the following information about the economy. The natural rate of unemployment is 0.04,Okun's Law is that ( - Y)/ = 2(u - ),and the Phillips curve relationship is π = π^e - 2 (u - 0.04). (a)What was the full-employment level of output in each year? (b)Calculate the growth rate of full-employment output each year. (c)If expected inflation was 0.04 for all four years,what was the inflation rate each year?

You Are Given the Following Information About the Economy