Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 9, Problem 8QP
(a)
To determine
Estimate the relationship between the actual
(b)
To determine
Estimate the relationship between the actual unemployment and natural unemployment rates in an inflationary gap.
(c)
To determine
Estimate the relationship between the actual unemployment and natural unemployment rates in the long-run equilibrium.
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Students have asked these similar questions
Classify each statement about the U.S. unemployment rate as true or false.
True
False
Answer Bank
Changes in technology and new workers joining the workforce have coñtributed to an overall upward trend in the unemployment rate.
It is very likely that an unemployment rate of 0% will never be observed.
The end of the 20th century saw some of the highest rates of unemployment in US history.
Unemployment generally remains stable and static over time,
The behavior of the unemployment rate is related to the business cycle.
What is the difference between the natural rate of unemployment vs. the full
employment rate of unemployment?
a) The natural rate of unemployment is the economy's long-run unemployme
rate in the absence of government intervention while the full employment
rate of unemployment is a policy preference initiated by Congress.
Ob) The natural rate of unemployment ranges between 5-6% unemployment
while the full employment rate of unemployment is lower, at about 4%.
c) Both the natural rate of unemployment and the full employment rate of
unemployment consist of the same 2 types of unemployment.
d) All of the above are true.
Consider an economy with the following data:
Employed = 891 million
Unemployed = 9 million
What is the unemployment rate in this economy?
Group of answer choices
A) 99%
B) 1%
C) 9%
D) 9.9%
Chapter 9 Solutions
Economics (MindTap Course List)
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
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Similar questions
- Full employment unemployment rate" (also called the natural rate of unemployment) is defined as a) The situation when all people who want to work are actually employed. b) Zero involuntary unemployment. c) The unemployment rate that would exist in the absence of cyclical unemployment. d) The situation of only frictional unemployment. e) The unemployment rate that would exist in the absence of structural unemployment.arrow_forwardQ)The natural rate of unemployment is the frictional rate that exists in every economy when people move between jobs, and economists refer to full employment when the rate of unemployment is at the natural rate. The natural rate of unemployment in Europe is normally twice and at times three times that of the USA. Can you explain why?arrow_forwardTypically, even at similar stages of the economic cycle, the unemployment rate in several West European countries is higher than in the United States. To what extent can the above observation possibly be linked or not with the fact that in Europe: (1) the unionization rate is higher (2) laws often make it more difficult to lay off people, (3) collective bargaining is more or less centralized, (4) unemployment insurance programs are relatively more generous.arrow_forward
- An economy is described by the following equations C = 62 + 0.6 (Y - T) T = 100 IP = 200 G = 80 NX = -30 Y* = 600 find the level of total unemployment at Y (actual output). Assume the Natural rate of Unemployment = 5%arrow_forwardWhen the actual unemployment rate is likely to fall below the natural rate of unemployment, we can expect thatarrow_forwardThere is an on‐going debate on how unemployment benefits affect the unemployment rate. In the context of the Mortensen‐Pissarides model, unemployment benefits are represented by the variable b. Explain carefully how an increase in b affects each equilibrium condition (Beveridge curve, vacancy supply condition, and wage setting curve.) How is the steady‐state unemployment rate impacted by an increase in b? Use the simulation tool here, https://www.briancjenkins.com/dmp‐model/simulation‐tool.html, to check your answer.arrow_forward
- Even an economy that is operating at peak efficiency will have a positive unemployment rate. Economists call this "full employment". Full employment is also known as The natural rate of unemployment frictional unemployment cyclical unemployment Structural unemploymentarrow_forwardWhich of the following would decrease the unemployment rate? an increase in the minimum wage an increase in the efficiency wage an increase in labor union membership government aid to retrain unemployed workersarrow_forwardFrom the Hysteresis theory, a long period of high unemployment, can increase the natural rate of unemployment. Which of the 3 types of unemployment that are part of the natural rate of unemployment you think is affected the most by long periods of high unemployment? What are some solutions you would propose to solve the problems caused by the Hysteresis theory?arrow_forward
- Consider an economy with the following data: Population (civilian, 16 and older, non-institutionalized) = 800 million. Employed = 364 million Labor Force = 400 million What is the unemployment rate in this economy? Group of answer choices A) 91% B) 36% C) 4.5% D) 9%arrow_forwardThe economy of Country X has an actual unemployment rate that is less than the natural unemployment rate. a) Draw a correctly labeled graph of the long-run aggregate supply, short-run aggregate supply, and aggregate demand curves, and show each of the following: Current Price Level labeled PL1 Current Real Output labelled Y1 Full employment output labeled Yf b) Suppose that investment spending on plant and equipment increases. On your graph in part (a), show the effect of the increase in investment spending on the equilibrium price level and real output in the short run.arrow_forwardThe aggregate demand curve shows at each level of unemployment what is the total demand for goods and services at each level of income what is the natural rate of inflation in the economy at each price level what is the total demand for goods and services at each price level what is the total supply of goods and servicearrow_forward
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