Yellen Says U.S. in the Vicinity of Full Employment

The transcript discusses how a stronger pace of investment can enhance capital formation, potentially boosting productivity and GDP. It highlights the uncertainty surrounding the magnitude of these effects. Lower marginal tax rates could increase labor supply, though estimates vary. The analysis includes insights from the Joint Committee on Taxation and other analysts. Despite uncertainties, larger impacts on aggregate supply could support GDP growth without necessitating tighter monetary policy. The discussion also touches on the current unemployment rate and its relation to full employment.

What is one potential benefit of increased investment according to the video?

• It might boost capital formation and productivity.

• It will decrease the unemployment rate immediately.

• It will reduce the need for foreign investment.

• It could lead to higher inflation.

How might lower marginal effective tax rates affect labor supply?

• They will definitely increase labor supply.

• They could potentially increase labor supply.

• They might have no effect on labor supply.

• They could decrease labor supply.

What is a key uncertainty mentioned in the analysis of tax rate impacts?

• The precise effect on labor supply.

• The exact number of jobs created.

• The effect on international trade.

• The immediate impact on inflation.

What is the potential impact of larger-than-expected effects on aggregate supply?

• It will have no impact on GDP growth.

• It will definitely cause a recession.

• It could lead to a need for tighter monetary policy.

• It might support faster GDP growth.

What is the current state of unemployment according to the video?

• It is higher than the long-run sustainable rate.

• It is lower than the long-run sustainable rate.

• It is exactly at the long-run sustainable rate.

• It is not mentioned in the video.