Which of the following policies would most likely reduce frictional unemployment? A. All of the stated policies are typically targeted to reduce frictional unemployment B. None of the of the stated policies are typically targeted to reduce frictional unemployment because frictional unemployment is the equivalent of “technological unemployment” articulated by Keynes in the General Theory C. Expansionary fiscal policy D. Reducing unemployment compensation payments E. Greater online or internet/web-based employment search sites

Which of the following policies would most likely reduce frictional unemployment? A. All of the stated policies are typically targeted to reduce frictional unemployment B. None of the of the stated policies are typically targeted to reduce frictional unemployment because frictional unemployment is the equivalent of “technological unemployment” articulated by Keynes in the General Theory C. Expansionary fiscal policy D. Reducing unemployment compensation payments E. Greater online or internet/web-based employment search sites

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter25: The Keynesian Perspective

Section: Chapter Questions

Problem 1SCQ: In the Keynesian framework, which of the following events might cause a recession? Which might cause...

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In the Keynesian framework, which of the following events might cause a recession? Which might cause inflation? Sketch AD/AS diagrams to illustrate your answers. A large Increase In the price of the homes people own. Rapid growth in the economy of a major trading partner. The development of a major new technology offers profitable opportunities for business. The Interest rate rises. The good imported from a major trading partner become much less expensive.
FILL IN THE BLANKS Unemployment occurs when a worker who is not currently employed is unable to find suitable paid employment. In every economy, however, there will always be people moving between jobs. This group is known as the unemployed. But, if finding another job takes so long so that the individual stops looking, then he/she is classified as a worker and is no longer counted in the unemployment statistics. An economy’s natural rate of unemployment is the sum of its frictional and employment. If the labor market become more efficient so that people looking for work find matching jobs quicker, then the natural rate of unemployment will . The increase in unemployment that occurs during recessions (or downturns) in the economy is known as the type of unemployment.
The structural unemployment rate is 1.3% and the frictional unemployment is 2.9%, and the economy's current unemployment rate is 4.2%. The economy is in: Group of answer choices full employment having reached the potential real GDP. a recessionary gap producing less than the potential real GDP. an inflationary gap having more unemployment than the natural unemployment. an inflationary gap having lower unemployment than the natural unemployment.
increases in a positive GDP gap are associated with increase in the unemployment rate. True Or False Explaine in detail
According to the Keynesian and New Keynesian theories; a. Show and explain the existence of involuntary unemployment in the labor market by using the Efficiency Wage Theory. b. Is the employment level that you found same with the full employment level indicated by the classical labor market theory? Why? Why not? c. According to the Keynesian theory, what would be the effect of the “A wave of investor and consumer pessimism about the future profitability of capital investments and lower future income” on output (Y), the real interest rate (r), employment (L) and the price level (P)? Distinguish between the short run and the long run effects by using the IS-LM-FE and AD-AS models and the effective labor demand theory.
Which of the following will most likely cause a change in the natural rate of unemployment? Select one: a. expansionary fiscal policy b. contractionary monetary policy c. contractionary monetary policy d. none of the other alternatives is correct e. expansionary monetary policy.
The natural unemployment rate is 5 percent and potential GDP is $10 trillion. If the unemployment rate is 9 percent, what is real GDP? Real GDP is _______. A. $10.8 trillion B. $9.2 trillion C. $9.6 trillion D. $10.4 trillion
What is the relationship between potential output and the natural rate of unemployment? a. If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 2 percent what is the natural rate of unemployment? Where is the economy operating relative to its potential GDP? b. What happens to the natural rate of unemployment and potential GDP if cyclical unemployment rises to 3 percent with other types of unemployment unchanged from part a? c. What happens to the natural rate of unemployment and potential GDP if structural unemployment falls to 1.5 percent with other types of unemployment unchanged from part a?
Distinguish between demand-pull inflation and cost-push inflation. Which of the two types is most likely to be associated with a negative GDP gap? Which with a positive GDP gap and when the price is $1500.
According to the Keynesian and New Keynesian theories; b. Is the employment level that you found same with the full employment level indicated by the classical labor market theory? Why? Why not?
However, the labor market is a derivative of the goods market in the Keynesian theory (“principle of effective demand”). Therefore, unemployment is explained by the lack of demand in the goods market. According to the Keynesian theory, what would happen to the unemployment rate if real wages fall? How should unemployment be reduced?
The version of Okun's law discussed in class implies that with no change in unemployment, real GDP growth is 3 percent. If the unemployment rate rose by 2 percentage points, Okun's law predicts that real GDP would: a. decreased by 4 percent b. decrease by 2 percent c. increase by 1 percent d. decrease by 1 percent