The table below shows real GDP,potential GDP and the unemployment rate for a hypothetical economy.
TABLE 30-3
-Refer to Table 30-3.What is the NAIRU in this economy?

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.What is the NAIRU in this economy?

Quizplus · Accepted Answer

NAIRU (Non-Accelerating Inflation Rate of Unemployment) refers to the unemployment rate at which inflation remains constant. In this economy, potential GDP is 1800 and the unemployment rate when real GDP equals potential GDP is 6.1%. Therefore, the NAIRU in this economy is 6.1%.

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