Question: [ 5 points ] Given the following information, use Okun's law to show that the output gap is negative. Please show your work. Natural unemployment
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[ 5 points ] Given the following information, use Okun's law to show that the output gap is negative. Please show your work. Natural unemployment rate = U*=4% - The coefficient o = 0.5 - Unemployment rate = 6%[ 5 points] Suppose that both oil prices and tax increase, what would happen to the overall price, output, and unemployment? Please illustrate these changes on a graph. [ 5 points ] Show the effects of a positive technology shock in the long and short run? Please use AD/AS model to demonstrate your answer. Suppose that the rate of returns on U.S dollar is 2% and the rate of return on Japanese yen (*) is 2.5%. Under interest parity, find the ratio of the current to the expected exchange rate (&/&)
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