(a) Determine whether each of the following statements is True, False or Uncertain. Give a brief explanation for your choice. 1. When the economy goes into a recession, there's an increase in frictional unemployment. ii. According to Okun's law, if full-employment output is $5,000 billion, then each percentage point of unemployment sustained for one year reduces output by $50 billion. llI. If the number of employed workers in a country decreases, the unemployment rate in the country will increase. lV. An increase in the duration of unemployment should be linked to a decrease in flows in and out of unemployment if one is to keep unemployment constant.
(a) Determine whether each of the following statements is True, False or Uncertain. Give a brief explanation for your choice. 1. When the economy goes into a recession, there's an increase in frictional unemployment. ii. According to Okun's law, if full-employment output is $5,000 billion, then each percentage point of unemployment sustained for one year reduces output by $50 billion. llI. If the number of employed workers in a country decreases, the unemployment rate in the country will increase. lV. An increase in the duration of unemployment should be linked to a decrease in flows in and out of unemployment if one is to keep unemployment constant.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question Two
(a) Determine whether each of the following statements is True, False or Uncertain. Give a brief explanation for your choice.
1. When the economy goes into a recession, there's an increase in frictional
ii. According to Okun's law, if full-employment output is $5,000 billion, then each percentage point of unemployment sustained for one year reduces output by $50 billion.
llI. If the number of employed workers in a country decreases, the unemployment rate in the country will increase.
lV. An increase in the duration of unemployment should be linked to a decrease in flows in and out of unemployment if one is to keep unemployment constant.
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