The following figure depicts the economy of Atlas,which is presently in equilibrium.
a)What is the size of its recessionary gap?
b)What is the size of its gap as a percentage of its actual GDP?
c)If the natural rate of unemployment is 5 percent,using Okun's Law,calculate the amount of unemployment in Atlas.
Correct Answer:
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b)25%
c)15% (...
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