1.) How potential GDP grows. The table below shows the labor market for the country.

a.When the labor market is in equilibrium, the real wage rate is _____an hour and _____ billion hours of labor a year are employed.

b.At _____ an hour, there is a surplus of 40 billion hours per year.

At $15 an hour, there is a shortage of ___billion hours per year

Real wage rate Quantity of labor demand Quantity of labo

(2009 dollars per hour) (billions of hours per year) supplied(billions

of hours per

year)

15 60 20

20 50 30

25 40 40

30 30 50

35 20 60