What formulas used to get the actual rate of employment?

timer Asked: Aug 11th, 2014
account_balance_wallet $5

Question Description

 25.    Assume the natural rate of unemployment is 5 percent.  What is the actual rate of unemployment if output is 4 percent below potential? 

Answer: 7%

Tutor Answer

School: Cornell University

 2 (unemployment\ rate\ -\ natural\ unemployment) = \frac{potential\ GDP - actual\ GDP}{potential\ GDP} \times 100%

(Actual rate of unemployment -Natural rate of Unemployment ) = 2

(Actual rate of unemployment -5) = 2

Actual rate of unemployment =5+2=7



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Thanks, good work

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