Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 3, Problem 8RQ
To determine
Meaning of full-employment output and the way it gets affected by an increase in participation rate and beneficial supply shock.
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Define full-employment output. How is full employment output affected by an increase in the participation rate? By a beneficial supply shock?
During a recession, which is more flexible in finding new employment: labor or capital goods?
Why did unemployment stay so high during the 1930s, in double digit levels? Why has employment grown so slowly since 2009?
Why might a favorable change to the economy such as technological change or a decrease in the price of imported oil be associated with an increase in frictional unemployment?
Chapter 3 Solutions
Macroeconomics
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 1NPCh. 3 - Prob. 2NPCh. 3 - Prob. 3NPCh. 3 - Prob. 4NPCh. 3 - Prob. 5NPCh. 3 - Prob. 6NPCh. 3 - Prob. 7NPCh. 3 - Prob. 8NPCh. 3 - Prob. 9NPCh. 3 - Prob. 10NPCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 6APCh. 3 - Prob. 7AP
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- Would you expect the natural rate of unemployment to remain the same within one country over the long run of several decades?arrow_forwardExplain how frictional unemployment can be good for the economy.arrow_forwardMacropoland, a country that is a natural gas and oil importer, has a natural rate of unemployment (at the full employment level of GDP) that is about 4.5%, and the long run average rate of inflation over time has been about 2%. However, during the period 1973-1974, the country experienced an inflation rate of about 15% while simultaneously experiencing unemployment of nearly 13%.At the present time, Macropoland is experiencing very sluggish consumption and investment (a result of a fall in the housing market), and unemployment has again edged up to around 9%. Inflation is very low at 0.4%.Macropoland has just hired you as their economic advisor. You have a big job ahead of you. Using your knowledge of aggregate demand and aggregate supply, can you explain what happened in these two time periods?Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical…arrow_forward
- The real business cycle theory believes the supply of labour is inelastic True Falsearrow_forwardWhat industry sectors are most likely to add jobs during a down economy and an improving economy respectively? Are there employment sectors that are essentially unaffected by economic fluctuations?arrow_forwardThe restructuring of the economy has caused the disappearance of manufacturing jobs. True or false? Explain?arrow_forward
- A key difference between the original Keynesian and New Keynesian approaches to the labour market , is that in the original model , nominal or money wages , are while in the New model , nominal wages arearrow_forwardAccording 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?arrow_forwardIn 2009, Papua New Guinea had an estimated natural rate of unemployment equal to 4.7% and an actual unemployment rate equal to 4.3%. What was the size of cyclical unemployment?arrow_forward
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