9. What are the two parts of the Fed's dual mandate? Answer the following with the dual mandateand bullseye chart in terms of signals to the Fed about the status of economy.The Fed's dual mandate, given to it by Congress inshould be federal employment and stable prices.The bullseye chart was developed by the Federal Reserve Bank of Chicago. It is a visual comparison ofthe current state of the economy with the Fed's dual mandate. The chart shows the inflation rate onthe ( horizontal, vertical ) axis and the unemployment rate on the ( horizontal, vertical ) axis and hascrosshairs where the two targets meet.The southwest (lower left) and northeast (upper right) quadrants send conflicting messages about whichmonetary policy is appropriate. If the point showing the actual rates of unemployment and inflationlies (northwest, southeast, southwest, northeast ) of the center of the bullseye, the Fed will be in apolicy predicament. The fact that the actual unemployment rate is below the full-employment rate ofunemployment will suggest that the Fed should be inclined toward a ( expansionary, restrictive )monetary policy. But the fact that the inflation rate is below 2 percent suggests that a ( stimulatory,contractionary) policy is in order.If the point showing the actual rates of unemployment and inflation lies ( northwest, southeast, southwest,northeast ) of the center of the bullseye, the opposite problem exists. There, the unemployment ratewill be suggesting an (expansionary, restrictive ) monetary policy (to reduce the unemployment ratedown to the 4.3 percent target) while the inflation rate will be suggesting a ( stimulatory,contractionary ) monetary policy (to reduce the inflation rate down to 2 percent).states that the Fed's two highest objectives6.

9)1.1970,federal and state 2.vertical axis, horizontal axis Â Â

s appropriate. If the point showing the actual rates of unemploym outheast, southwest, northeast ) of the center of the bullseye, the at. The fact that the actual unemployment rate is below the full-em 11

s appropriate. If the point showing the actual rates of unemploym outheast, southwest, northeast ) of the center of the bullseye, the at. The fact that the actual unemployment rate is below the full-em 11

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please no written by hand solutions Suppose that the markup of goods prices over marginal cost is 5%, and that the wage-setting equation is W= P(1-u), where u is the unemployment rate. a. What is the real wage, as determined by the price-setting equation? b. What is the natural rate of unemployment? c. Suppose that the markup of prices over costs increases to 10%. What happens to the natural rate of unemployment? Explain the intuition behind your answer.
In 2021, WSJ reported that in September of that year, 4.4 million workers quit their jobs, primarily because they found better work elsewhere. This is an example of O a. Frictional unemployment Cyclical unemployment Ob. Structural unemployment C. Declining labor force participation d.
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A headline reads: "Steel industry suffers slump as import competition increases; unemployment rises." This type of unemployment can best be characterized in economic terms as: Select one: O a. natural O b. frictional O c. structural O d. cyclical
The natural unemployment rate incorporates (that is, it includes and directly tracks) structural unemployment: A. sometimes, depending on the level of cyclical unemployment. B. false C. true D. rarely, depending on the level of cyclical unemployment
What occurs in the labor market when cyclical unemployment increases and other things remain the same? When cyclical unemployment increases and other things remain the same, O A. the natural unemployment rate increases B. the amount of structural unemployment increases O C. the amount of frictional unemployment increases D. the natural unemployment rate does not change
Real GDP A C Y* Y Time Above is a diagram of the business cycle. When the economy is operating at point B, which of the following is true? O The frictional and structural unemployment rates are negative. The economy is not yet at full employment. The structural unemployment rate is negative. The unemployment rate is 0%. O The economy is at its natural rate of unemployment.
During the contraction phase of the business cycle, the unemployment rate will and the inflation rate will O fall or rise; rise O rise; fall or rise O fall; rise rise; fall -
If a sizable number of workers switched from full-time to half-time employment, then: O the official unemployment rate would fall. O the official unemployment rate would rise. the official unemployment rate would change but in an uncertain direction. O the official unemployment rate would remain unchanged.
When the economy is at full employment, which types of unemployment remain? A. frictional and cyclical B. frictional and structural C. cyclical and structural D. None of the above. Full employment means that there is no unemployment, so the unemployment rate would be zero. The "normal" underlying level of unemployment in the economy is O A. the sum of structural unemployment and frictional unemployment. B. the natural rate of unemployment. C. the full-employment rate of unemployment. O D. All of the above.
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