Homework Answers
Option 1. Equilibrium real GDP is less than the potential level of GDP
Explanation: Cyclical unemployment takes place whenever there is a recessionary gap, i.e.; the equilibrium real GDP is less than the potential GDP.
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Question 4 An economy has cyclical unemployment whenever Select the correct answer below: O equilibrium real...
The graph below shows an economy in macroeconomic equilibrium. Suppose the federal government increases block grants...
The graph below shows an economy in macroeconomic equilibrium. Suppose the federal government increases block grants to state and local governments. All else equal, illustrate the effect of this expansionary fiscal policy on macroeconomic equilibrium. Provide your answer below: Price Level Aggregate Supply Aggregate Demand Whenever equilibrium real GDP is below the full-employment level of GDP, we have Select the correct answer below: O a natural level of employment O cyclical unemployment O only frictional and structural unemployment higher than...
Cyclical unemployment can best be described as the increase in unemployment when the economy is in...
Cyclical unemployment can best be described as the increase in unemployment when the economy is in a boom. o increase in unemployment when the economy is in a recession. amount of unemployment when real and potential GDP are equal. O increase in unemployment above the natural rate during and in the aftermath of recessions. O amount of unemployment when real and nominal GDP are equal.
In the AS-AD model, cyclical unemployment occurs when aggregate supply increases. the economy is not at...
In the AS-AD model, cyclical unemployment occurs when aggregate supply increases. the economy is not at a short run equilibrium in the AS-AD model. actual GDP falls below potential real GDP in the equilibrium of the AD and short-run AS curves.
If unemployment is above the natural level of unemployment, which one of these statements MUST be...
If unemployment is above the natural level of unemployment, which one of these statements MUST be true? Select one: O a. Employment must be below full employment O b. Cyclical unemployment must be negative o c. Real GDP must be above potential GDP d. The economy must be in an expansion e. The economy is experience a strong demand-pulled inflation
If the cost of a typical consumption basket in an economy rises from $40 to $48...
If the cost of a typical consumption basket in an economy rises from $40 to $48 in a period of one year, then there is an inflation of __________ in that time period. 8 8% 20% O 44 The cost of a typical consumption basket in $48 in 2015. In the base year, the cost of the same basket was $36. Then the price level in 2015 is 0 75 133 O 100 40 If an economy's output is more...
An economy experiencing healthy macroeconomic conditions a.Is performing below potential; has zero percent overall unemployment rate;...
An economy experiencing healthy macroeconomic conditions a.Is performing below potential; has zero percent overall unemployment rate; and has zero percent cyclical unemployment. b.Is performing below potential; has unemployment rate equal to the natural rate; and has zero percent frictional unemployment. c.Is performing at potential; had unemployment rate equal to the natural rate; and has zero percent cyclical unemployment. d.Is performing at potential; has zero percent overall unemployment rate; and has zero percent cyclical unemployment. Suppose your uncle started college in...
Use the table to answer the questions u unemployment rate, unatural rate of unemployment, Y-output, Y*...
Use the table to answer the questions u unemployment rate, unatural rate of unemployment, Y-output, Y* - full employment output Year 2007 2008 2009 4% 45% 5.25% 4.5% 4.5% 4.5% Given the information in the table, select the answer that best describes the condition of this economy in 2007. O The economy is in an exceptional expansion because output is below potential The economy is in an exceptional expansion because Y is greater than Y*. O The economy is healthy,...
3. The table below shows unemployment and labor force statistics for an economy. Actual rate of...
3. The table below shows unemployment and labor force statistics for an economy.Actual rate of unemployment3%Natural rate of unemployment4%Population of the country125mitlonNumber of people employed97miltionNumber of people unemployed3 millionNumber of people employed part-time5 millionNumber of discouraged workers2 milliona. Calculate the size of the labor force.b. Calculate the labor force participation rate. Show your work.c. Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain.d. Calculate...
Question 39 The theory of rational expectations holds that Select the correct answer below: people form...
Question 39 The theory of rational expectations holds that Select the correct answer below: people form the most accurate possible expectations about the future they can, using all information available to them. people rationally expect recessions to persist people adapt their expectations based on the past people do not trust their expectations Question 1 Use the aggregate supply (AS) curve and aggregate demand (AD) curve below to determine the equilibrium price level and equilibrium real G DP for this economy....
Question 83 (Mandatory) (1 point) Which term refers to the rate of unemployment that occurs when...
Question 83 (Mandatory) (1 point) Which term refers to the rate of unemployment that occurs when the economy is producing its potential GDP? a) the natural rate of unemployment b) cyclical unemployment c) structural unemployment d) the normal rate of unemployment Question 84 (Mandatory) (1 point) Exhibit 14-3 Price level Potential output LRAS SRAS AD Real GDP Refer to the graph in the exhibit. In this situation, how could the Bank of Canada return the economy to potential output? a)...
The graph below shows an economy in macroeconomic equilibrium. Suppose the federal government increases block grants to state and local governments. All else equal, illustrate the effect of this expansionary fiscal policy on macroeconomic equilibrium. Provide your answer below: Price Level Aggregate Supply Aggregate Demand Whenever equilibrium real GDP is below the full-employment level of GDP, we have Select the correct answer below: O a natural level of employment O cyclical unemployment O only frictional and structural unemployment higher than...
Cyclical unemployment can best be described as the increase in unemployment when the economy is in a boom. o increase in unemployment when the economy is in a recession. amount of unemployment when real and potential GDP are equal. O increase in unemployment above the natural rate during and in the aftermath of recessions. O amount of unemployment when real and nominal GDP are equal.
If unemployment is above the natural level of unemployment, which one of these statements MUST be true? Select one: O a. Employment must be below full employment O b. Cyclical unemployment must be negative o c. Real GDP must be above potential GDP d. The economy must be in an expansion e. The economy is experience a strong demand-pulled inflation
If the cost of a typical consumption basket in an economy rises from $40 to $48 in a period of one year, then there is an inflation of __________ in that time period. 8 8% 20% O 44 The cost of a typical consumption basket in $48 in 2015. In the base year, the cost of the same basket was $36. Then the price level in 2015 is 0 75 133 O 100 40 If an economy's output is more...
Use the table to answer the questions u unemployment rate, unatural rate of unemployment, Y-output, Y* - full employment output Year 2007 2008 2009 4% 45% 5.25% 4.5% 4.5% 4.5% Given the information in the table, select the answer that best describes the condition of this economy in 2007. O The economy is in an exceptional expansion because output is below potential The economy is in an exceptional expansion because Y is greater than Y*. O The economy is healthy,...
Question 39 The theory of rational expectations holds that Select the correct answer below: people form the most accurate possible expectations about the future they can, using all information available to them. people rationally expect recessions to persist people adapt their expectations based on the past people do not trust their expectations Question 1 Use the aggregate supply (AS) curve and aggregate demand (AD) curve below to determine the equilibrium price level and equilibrium real G DP for this economy....
Question 83 (Mandatory) (1 point) Which term refers to the rate of unemployment that occurs when the economy is producing its potential GDP? a) the natural rate of unemployment b) cyclical unemployment c) structural unemployment d) the normal rate of unemployment Question 84 (Mandatory) (1 point) Exhibit 14-3 Price level Potential output LRAS SRAS AD Real GDP Refer to the graph in the exhibit. In this situation, how could the Bank of Canada return the economy to potential output? a)...
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