Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 22, Problem 6MCQ
To determine
The scenario where the value of real
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Which of the below is true about the above case?
a. The natural rate of unemployment is above the actual rate of unemployment
b. The cyclical rate of unemployment is greater than zero
c. There is an inflationary output gap
d. There is a recessionary output gap
e. there is a recession
f. actual GDP is greater than the potential GDP
Suppose that the unemployment rate is equal to the natural rate of unemployment. Which of the following is true?
a.
The economy has a full employment.
b.
Cyclical unemployment is negative.
c.
Frictional unemployment becomes zero.
d.
The economy is in recession.
If some employed workers exit the labor force, the unemployment rate will be ______
Chapter 22 Solutions
Foundations of Economics (8th Edition)
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- The normal rate of unemployment that persists in the economy in the long run is called a. frictional unemployment. b. structural unemployment. c. cyclical unemployment. d. the natural rate of unemployment.arrow_forward5 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.arrow_forwardHow does an increase in the minimum wage affect unemployment levels in a perfectly competitive labor market? A. It has no effect on unemployment levels. B. It decreases unemployment levels. C. It increases unemployment levels. D. It initially increases but eventually decreases unemployment levels.arrow_forward
- If the number of people in the labor force is 170 million and 155 million people are employed, then the unemployment rate is __________ percent.arrow_forwardThe unemployment which is in excess of the NAIRU is called _____. A.seasonal unemployment B.frictional unemployment C.structural unemployment D.hidden unemployment E.cyclical unemploymentarrow_forwardWhen an economy is operating in a positive output gap (Inflationary Gap) which of the following must be true? a. Unemployment is less than full employment b. Employment is less than full employment c. Employment is equal to full employment d. Unemployment is greater than the Natural rate of Unemploymentarrow_forward
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