If the economy's full employment rate of output is $6.0 trillion, what will happen to the unemployment rate assuming that  it will persist into the future?

Q: As a result of the change in real GDP, will an increase in the interest rate on bank loans lead to…

A: The increase in the real GDP and the increase in the interest rate are two different factors. When…

Q: Suppose the Federal Reserve begins to increase the supply of money at an increasing rate. What…

A: The money supply refers to the flow of money into the economy or the supply of money into the…

Q: If wage rates are not flexible, can the economy be self-regulating?

A: An economy is self-regulating if it can restore itself from disequilibrium to long-run equilibrium.…

Q: Are people necessarily worse off when the price level rises at the same rate as their income?

A: Quantity of enterprise depends on certain criterias. It would increase if there are maximum number…

Q: Based on the articles “Unemployment Claims Remain Historically High” and “US Consumer Spending Rose…

A: Unemployment refers to a situation where a person is willing to work but he/she doesn't get…

Q: What variable allows our macroeconomic model to automatically adjust GDP back to full employment…

A: Equilibrium GDP in short-run occurs at the intersection point of AD and SRAS If actual GDP <full…

Q: According to Keynes, when the price level rises, it causes the interest rate to do what? It causes…

A: Money Demand: - The demand for money is the individual's desire to keep their assets in the form of…

Q: The full employment output level is the maximum amount of output that the economy can produce when…

A: Equilibrium in the goods market occurs at the intersection of AD and AS curves.

Q: The shortfall between actual real GDP and potential GDP a. decreases as the unemployment rate rises.…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: The shortfall between actual real GDP and potential GDP a decreases as the unemployment rate rises…

A: The percentage of non-employed workers in labor force is called unemployment rate.

Q: Distinguish between demand-pull inflation and cost-push inflation. Which of the two types is most…

A: Inflation refers to the increase in the general price level. The quantity demanded and quantity…

Q: Is it good for an economy to experience sudden inflation or deflation? Explain with examples

A: Answer:- Lоw-level  inflаtiоn  (2–4  рer  сent)  wоuld  indiсаte  the  eсоnоmy  is  dоing  well,…

Q: What impact does full employment have on the economy?

A: When all the labor resources in an economy are utilized in an optimum manner or in the most…

Q: Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of…

A: To increase aggregate demand, expansionary fiscal policy is implemented using following tools: (1)…

Q: Fearing a recession, the government decides to give citizens a tax rebate to buy Christmas gifts.…

A: The government makes a decision according to the current market situation and future expectations.…

Q: Suppose banks require a real interest rate of 12 percent. If they expect inflation to be 3 percent,…

A: A real interest rate is the one which is adjusted for the inflation whereas nominal interest rate…

Q: Some politicians have suggested tying the minimum wage to the consumer price index (CPI). Applying…

A: The minimum wage is the government determined wage rate that the employer in the economy should pay…

Q: Bell-land's economy had an unemployment rate of 3% then the economy went into a recession and the…

A: Okun has demonstrated the existence of a reciprocal relationship between unemployment and economic…

Q: Assume that the AD curve intersects the AS curve in the Neoclassical Region and that the government…

A: The intersection of aggregate demand and aggregate supply curve gives the macroeconomic equilibrium…

Q: The country of Merryville has an unemployment rate that is greater than the natural rate of…

A: 2. The natural rate of unemployment is the level of unemployment that persists in the economy at the…

Q: Explain how real GDP is determined when the price level is fixed.

A: The measure that depicts the value of goods and services being produced in an economy during a given…

Q: Economists widely agree that the Consumer Price Index understates the true U.S. inflation rate.…

A: Consumer price index does not include imported goods.

Q: Use the table to answer the questions. u = unemployment rate, u* = natural rate of unemployment, Y =…

A: please find the answer below.

Q: Which of the following are true of an economy operating with a negative GDP gap? Check all that…

A: Gross Domestic Product (GDP at MP): This is the gross market value of all the final commodities…

Q: What might be an unintended effect of an inflation rate ceiling? Group of answer choices The real…

A: As per the Fisher equation, Real interest rate = Nominal interest rate - Inflation rate

Q: Explain why deflation might be considered to be an economic problem

A: We can define deflation as a reduction in the overall level of prices in an economy.

Q: The difference between nominal GDP and real GDP is that nominal GDP Group of answer choices measures…

A: Nominal GDP is the value of final goods and services at the current year prices. Real GDP is the…

Q: employment

A:

Q: Refer to the figure at right. If the economy is currently operating at point​ C, then there is   A.…

A: Since SRAS and AD intersect to the right of LRAS, the correct answer is the inflationary gap. There…

Q: Suppose that the inflation rate remains constant while output increases and the unemployment rate…

A: The aggregate supply and aggregate demand model shows the relationship between real GDP and price…

Q: The real interest rate is 6 percent a year and the income tax rate is 50 percent.   With no​…

A: Given real rate of interest = 6 % Income tax rate = 50 % Inflation rate = 0

Q: Suppose both nominal GDP rises by 10 percent and real GDP rise by 2 percent. What has happened to…

A: Given, Rise in nominal GDP = 10% Rise in real GDP = 2%

Q: Which of the following policies would most likely reduce frictional​ unemployment?   A. All of the…

A: Frictional unemployment is a type of unemployment that arises when workers are searching for new…

Q: The Consumer Price Index for the different years are as follows. 2017 299,74 2018 330,75 2019…

A: Given  CPI2017 = 299.74 CPI2018 = 330.75 CPI2019 = 398.07 CPI2020 = 446.45

Q: What are the two biggest recessions in terms of length and magnitude in the Graph. Remember shahded…

A: Recession refers to the situation where the growth rate of real GDP is negative over the previous…

Q: Some politicians have suggested tying the minimum wage to the consumer price index. Applying the…

A: To know the effect of policy on the level of output, the price level & the employment:…

Q: The unemployment rate may underestimate the true extent of unemployment if:   many part-time…

A: In an economy, unemployment rate is the proportion of labor force that is actively looking for job…

Q: During recessions, output   a. rises, and unemployment falls   b. falls, and unemployment rises…

A: A recession is one of the business cycle fluctuations that represents a decline in economic activity…

Q: For Keynes involuntary unemployment existed only when the real wage was too high, but for Clower…

A: Keynes Involuntary unemployment has been one of the situation, that has lead to the workers ability…