Foundations of Economics - With MyEconLab
8th Edition
ISBN: 9780134641720
Author: BADE
Publisher: PEARSON
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Question
Chapter 22, Problem 7MCQ
To determine
The relationship between the output gap, the real
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During a recession, the
Part 2
A.
cyclical rate of unemployment is positive.
B.
cyclical rate of unemployment is negative.
C.
cyclical rate of unemployment is zero.
D.
natural rate of unemployment has fallen.
The natural rate of unemployment is
a.
when the economy is at potential GDP.
b.
when the unemployment rate is at full employment.
c.
when there is no cyclical unemployment.
d.
all of the above.
e.
only a and b.
An unexpected increase in aggregate demand causes
A.
the unemployment rate to fall, with no change in the price level.
B.
simultaneously the price level to fall and the unemployment rate to fall.
C.
simultaneously the price level to rise and the unemployment rate to fall.
D.
the price level to rise, but the duration of unemployment will remain constant, so the unemployment rate remains constant.
Chapter 22 Solutions
Foundations of Economics - With MyEconLab
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Similar questions
- What type of unemployment (cyclical, frictional, or structural) applies to each of the following: landscapers laid off in response to a drop in new housing construction during a recession. coal miners laid off due to EPA regulations that shut down coal fired power a financial analyst who quits his/her job in Chicago and is pursing similar work in Arizona printers laid off due to drop in demand for printed catalogues and flyers as firms go the internet to promote an advertise their products. factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.arrow_forwardA country's structural unemployment rate is 4.2%, the natural unemployment rate is 5.6%, and the cyclical unemployment rate is 6.7%. Calculate the frictional unemployment rate and the unemployment rate.arrow_forwardThe natural rate of unemployment is the A) unemployment rate occurring when actual and potential GDP are equal. B) unemployment rate associated with the business cycle. C) full employment rate of unemployment. D) A and B E) A and Carrow_forward
- Suppose that the unemployment rate is 5% and the natural rate of unemployment is 4%. Answer the cyclical unemployment in % and answer if the economy is in a boom or a recession. Cyclical unemployment: Boom or Recession?arrow_forwardHow does the unemployment rate behave over the business cycle? The unemployment rate _______. A. remains relatively constant over the business cycle at an average of 5.7 percent B. equals 10 percent during a recession and falls to zero during an expansion C. rises during a recession and falls during an expansion D. equals 100 minus the employment-population ratio over the business cyclearrow_forwardQ.1.4 Out of 20 million people in the population, 9 million people are in the labour forceand 3 million are unemployed, therefore the unemployment rate is: choose the correct answer(2)(a) 3 percent. (b) 15 percent. (c) 30 percent. (d) 33,3 percent.arrow_forward
- Q)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_forwardQ.1.4 Out of 20 million people in the population, 9 million people are in the labour forceand 3 million are unemployed, therefore the unemployment rate is:(1) 3 percent. (2) 15 percent. (3) 30 percent. (4) 33,3 percent.arrow_forwardQUESTION 16 The natural rate of unemployment is the a. unemployment rate that would prevail with zero inflation b. rate associated with the highest possible level of GDP c. difference between the long-run and short-run unemployment rates d. the normal rate of unemployment around which the actual unemployment rate fluctuatesarrow_forward
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