Macroeconomics 12th Edition by William Baumol,Alan Blinder

Exercise 3

Most economists believe that from 2003 to 2006, actual GDP in the United States grew faster than potential GDP. What, then, should have happened to the unemployment rate over those three years? Then, from 2006 to 2010, actual GDP grew slower than potential GDP, even contracting for several quarters. What should have happened to the unemployment rate over those three years? (Check the data on the inside back cover of this book to see what actually happened.)