Hello, and thanks for your question.
2. Labor force = 500 - (120 + 150) = 230
Official unemployment rate (unemployed / labor force) = (23 / 230) = 10%
3. GDP gap = (9% - 5%) x 2 = 8%
Forgone output estimated at (8% of $500 billion) = $40 billion
4. (a) This year's rate of inflation = (121 - 110) / 110 = 10%
(b) This year's rate of inflation = (108 - 110) / 110 = -1.82%
(c) A negative rate of inflation is referred to as "deflation"
6. (a) Real income % increase (approx.) = (5.3% - 3.8%) = 1.5%
(b) Rate of inflation (approx.) = (2.8% - 1.1%) = 1.7%
Hope this helps!
Assume that the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Assume further that planned investment Ig and net exports Xn are independent of the level of real GDP and constant at Ig = 30 and Xn = 10. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig+ Xn
a. Calculate the equilibrium level of income or real GDP for this economy.
b. What happens to equilibrium Y if Ig changes to 10? What does this outcome reveal about the size of the multiplier?