Suppose the target rate of unemployment is 5 percent but the actual rate of unemployment is 2 percent. Given this information, which of the following policies is the least appropriate according to the AS/AD model? A, contractionary monetary policy B. an increase in the value of the dollar to decrease exports C. an increase in interest rates from the central bank D. None of the available answers. E. expansionary monetary policy

Suppose the target rate of unemployment is 5 percent but the actual rate of unemployment is 2 percent. Given this information, which of the following policies is the least appropriate according to the AS/AD model? A, contractionary monetary policy B. an increase in the value of the dollar to decrease exports C. an increase in interest rates from the central bank D. None of the available answers. E. expansionary monetary policy

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A, contractionary monetary policy

B. an increase in the value of the dollar to decrease exports

C. an increase in interest rates from the central bank

D. None of the available answers.

E. expansionary monetary policy

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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