Question

X 19.1 Study Exercise 6 (Algo) Question Help Consider the macroeconomic data shown below for a hypothetical country's economy a. Compute the output gap for each year as a percentage of potential output. (Round your responses to one decimal place and include a negative sign where appropriate.) Actual Real GDP Potential Real GDP Output Gap Unemployment Rate Year (billions of $) (billions of $) (% of potential) (% of labour force) 2011 1163 1188 11.4 2012 1182 1193 10.6 2013 1195 1203 9.4 2014 1210 1213 8.9 2015 1225 2016 1245 1242 2017 1251 1242 2018 1262 1258 2019 1277 1277 1225

Answer 1

Answer : The % of output gap = [(Actual real GDP - Potential real GDP) / Potential real GDP] * 100

Year	Output Gap (% of potential)
2011	[(1163 - 1188) / 1188] * 100 = (- 25 / 1188) * 100 = - 2.1
2012	[(1182 - 1193) / 1193] * 100 = (- 11 / 1193) * 100 = - 0.9
2013	[(1195 - 1203) / 1203] * 100 = (- 8 / 1203) * 100 = - 0.7
2014	[(1210 - 1213) / 1213] * 100 = (- 3 / 1213) * 100 = - 0.2
2015	[(1225 - 1225) / 1225] * 100 = (0 / 1225) * 100 = 0
2016	[(1245 - 1242) / 1242] * 100 = 0.2
2017	[(1251 - 1242) / 1242] * 100 = 0.7
2018	[(1262 - 1258) / 1258] * 100 = 0.3
2019	[(1277 - 1277) / 1277] * 100 = 0