Final answer:
The natural rate of unemployment in Okunland is approximately 5%.
Step-by-step explanation:
The natural rate of unemployment is the unemployment rate that exists when the economy is at full employment. When the actual unemployment rate is equal to the natural unemployment rate, the economy is considered to be at full employment. In Okunland, the actual unemployment rate is 8% and the potential GDP is $8,000 billion. To find the natural rate of unemployment, we need to determine the difference between potential GDP and the actual GDP when the unemployment rate is 8%. We can use Okun's Law, which states that for every 1% increase in the unemployment rate above the natural rate, there will be a 2% decrease in real GDP.
First, we calculate the difference between potential GDP and actual GDP: $8,000 billion - $7,520 billion = $480 billion.
Next, we calculate the difference in the unemployment rate from the natural rate: 8% - natural rate = 8% - natural rate.
Using Okun's Law, we know that a 1% increase in the unemployment rate above the natural rate corresponds to a 2% decrease in real GDP. So, we can set up the following equation: 2(8% - natural rate) = $480 billion.
Simplifying the equation, we get: 16% - 2n = $480 billion.
Adding 2n to both sides: 16% = $480 billion + 2n.
Dividing both sides by 2: 8% = $240 billion + n.
Subtracting $240 billion from both sides: n = 8% - $240 billion.
Neglecting the typos: the natural rate of unemployment in Okunland is approximately 5%.