- The short – run equilibrium is 500, the real GDP is 500, and where equals real GDP supplied in the short run and the equilibrium demanded is at a price level 95 billion. The gap that exists between the potential GDP and the actual GDP is called GDP gap. When the potential GDP is higher than the actual GDP
- Equilibrium real GDP is less than potential GDP, so Japan has a recessionary gap. The recessionary equals the difference between potential GDP and real GDP, which are ¥ 100 trillions.
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- The unemployment rate in Italy in January 2013 was 11.3 and in July 2013 12.1.
Formula of labour force participation:
The unemployment rate increases in July 2013 which is negative change and expected in increasing inflation. However, the labour force participation rate also increased in July 2013 which further confirms that more and more people who want work in July 2013. Based on the above facts, it can be foreseen that there its positive changes in the employment sector in Italy 2013