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Unformatted text preview: since more workers are competing for the same number of jobs. Therefore, unemployment will increase unless the growth rate exceeds the sum of productivity growth and labor force growth. b. For the unemployment rate to decrease by 0.5% per year for the next four years, output must grow at 4.25% per year for each of the next four years. c. Okun’s law is likely to become u t-u t-1 =-0.4*( g yt-5%)...
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This note was uploaded on 12/22/2011 for the course MACROECON 301 taught by Professor Christinanagy during the Fall '09 term at University of Washington.
- Fall '09