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Assume that the relationship between GDP and the employment rate has a positive slope. If an...

Assume that the relationship between GDP and the employment rate has a positive slope. If an employment rate of 100 million is associated with a GDP level of $20 trillion and an employment rate of 110 million is associated with a GDP level of $21 trillion, what can you assume is the GDP level for an employment rate of 120 million?

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Answer #1

GDP and employment rate has a positive slope, which can be calculated as follows:

We can find the GDP level for an employment rate of 120 million as follows:

Lets assume that the GDP level for an employment rate of 120 million is x, then

Therefore, the GDP level for an employment rate of 120 million is $22 trillion.

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