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Topic: |
Business
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Number of pages / Number of words: |
5 / 1309 |
Essay's paper body
Unemployment affects the other economic variables with a direct hit on the GDP or gross domestic product.
GDP gap = actual GDP â potential GDP
The above equation demonstrates how the GDP gap is found. Okunâs Law states that âwhen the economy fails to create enough jobs for all who area able and willing to work, potential production of goods and services is irretrievably lostâ (ibid)...
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Where unemployment affects the numbers of jobs within the economy, inflation affects the purchasing of the products or services. The main measure of inflation in the United States is the Consumer Price Index, which is compiled by the United States Department of Labor Bureau of Labor Statistics. According to the Bureau, the CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy...
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