Answer to Question #262677 in Macroeconomics for Emily McNeil

Question

if a nations maximum GDP (with 0% unemployment) is $20 trillion, how much is full employment GDP (with 5% unemployment)

Answer 1

Full employment GDP = Maximum GDP × (1-unemployment rate)

$=\$20 trillion × (1-0.05) = \$ 20 trillion × 95\% = \$ 19 trillion$

full employment GDP will be $19 trillion.