Explain how an increase in your nominal income and a decrease in your real income might occur simultaneously. Who loses from inflflation? Who loses from unemployment? If you had to choose between (a) full employment with a 6 percent annual rate of inflflation and (b) price stability with an 8 percent unemployment rate, which would you choose? Why?

Q: When the following events happen, does the unemployment rate rise (R), fall (F), or stay the same…

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A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

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A: labor force = employed + unemployed thus unemployed= 170-155 mn = 15 million

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Q: What are the possible effects of a high unemployment rate on a country's economy?

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