1. If the economy currently has a frictional unemployment rate of 2 percent, structuralunemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclicalunemployment of 2 percent, what is the natural rate of unemployment? Where isthe economy operating relative to its potential GDP?

The natural rate of unemployment. Answer: The main types of unemployment include the cyclical,…

Answered: 1. If the economy currently has a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The sum of frictional, seasonal, and structural unemployment is referred to as the _______________________________. This is the average level of unemployment that is expected to prevail in an economy and in the absence of cyclical unemployment. a. natural rate of unemployment b. “full employment" unemployment rate c. normal rate of unemployment d. none of the above is correct e. a, b, and c are all correct
What is meant by "full employment"? Why is full employment desirable? Can we have both full employment and unemployment at the same time?.
The version of Okun's law discussed in class implies that with no change in unemployment, real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's law predicts that real GDP would: a. decreased by 4 percent b. decrease by 2 percent c. increase by 1 percent d. decrease by 1 percent
Economics If the cyclical unemployment rate is 2.04% and the economy is producing at 95% of potential output, how sensitive is the unemployment rate to short-run changes in GDP? Write your answer as a fraction and don't forget the minus sign. Round your answer at two (2) decimals.
Scenario 1. Assume that frictional unemployment is 25; structural unemployment is 50; cyclical unemployment is 150; discouraged workers = 75; employed workers = 750; underemployed workers = 200. Use this information to answer the following 5 questions.Refer to Scenario 1. Is the economy at full employment? Question 15 options: a) Yes, because the unemployment rate is below 10% b) No, because the unemployment rate exceeds the natural rate of unemployment c) No, because cyclical unemployment exists in the economy d) Answers B and C are both correct
part 2
Suppose the real GDP of an economy is $440 bilition dollars and its unemployment rate is 6%. If the natural rate of unemployment is estimated at 4%, what is the value of the country's potential GDP (LAS) in billions of dollars? Value of the country's potential GDP (LAS) is $ .......billion.
What type of unemployment do retraining programs seek to reduce? How might government-funded retraining influence the natural unemployment rate? Retraining programs seek to reduce the amount of _______ unemployment because _______. A. frictional; by giving workers the skills needed for the available jobs, people entering the labor force will immediately find employment B. cyclical; by giving workers the skills needed for the available jobs, recessions can be avoided C. structural; the programs aim to give workers the skills needed for the available jobs D. all types of; the natural unemployment rate will fall
b. Distinguish between cyclical, frictional and structural unemployment (1%)Assume that in a particular year the natural rate of unemployment is 5% and the actual rate of unemployment is 9%. Use Okun’s law to determine the size of the GDP gap in percentage-point terms. If the nominal GDP is$500 billion in that year, how much output is being forgone because of cyclical unemployment (2%)
5 10. The natural rate of unemployment in an economy is estimated at 3%. The current unemployment rate is 4%. Is the economy producing more than potential real GDP, less than potential real GDP, or exactly real GDP? Explain your answer.
What are the possible effects of a high unemployment rate on a country's economy? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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1. If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment? Where is the economy operating relative to its potential GDP?