Homework Answers
C.
Producing at its full employment real GDP
The natural rate of unemployment refers to the minimum unemployment
rate whereby inflation is stable. Natural rate of unemployment is
also known by Non Accelerating Inflation Rate of
Unemployment.
The economy is considered to be at full employment when actual
unemployment is equal to the natural rate of unemployment. In this
situation, the real GDP is equal to potential GDP.
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If an economy is operating at the natural rate of unemployment, it is OA) experiencing inflation....
In 2019, the United States is experiencing an unemployment rate that is below its natural rate...
In 2019, the United States is experiencing an unemployment rate that is below its natural rate of unemployment. That is, its labor force is more than fully employed. However, the country is suffering from a rising fiscal deficit, a rising government debt/GDP ratio, and an expanding current account deficit. In addition, after years of quantitative easing in the wake of the 2008-09 financial crisis and economic recession, the Federal Reserve must now roll back its quantitative easing and shrink its...
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
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Suppose that the economy is experiencing a high level of inflation rate and unemployment is below the natural rate. How does the economy return to the natural rate of unemployment if this higher inflation rate persists?
Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing GDP...
Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing GDP back to the full employment level: What would you suggest policy makers do as the correct course of action?
The natural unemployment rate is the unemployment rate when the economy is in A neither a...
The natural unemployment rate is the unemployment rate when the economy is in A neither a recession nor a boom. B any part of the business cycle. C a boom. D a recession
A supply shock is A. an increase in the rate of inflation as a result of...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing GDP...
Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing GDP back to the full employment level: What would a conservative economist suggest policy makers do as the correct course of action? (Think of those that may align their thinking to that of Say, who by the way, are referred to as classical liberals.)
Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing GDP...
Suppose the economy is experiencing a recession with high unemployment. With a goal of increasing GDP back to the full employment level: What would a liberal economist suggest policy makers do as the correct course of action? (Think of those that may align their thinking to that of Keynes, a more modern way of using the term liberal.)
An economy has the natural rate of unemployment equal to 8.3%. The inflation rate in the...
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Consider an economy with a natural unemployment rate, u, of 4%. The expectations-augmented Philli...
Consider an economy with a natural unemployment rate, u, of 4%. The expectations-augmented Phillips curve is Assume that Okun's Law holds so that a 1 percentage point increase in the unemployment rate maintained for one year reduces GDP by 2% of full employment output. Note: Okun's Law can be expressed as: 2( u-u) a. Consider a two-year disinflation. In the first year actual inflation, π' is 14% and expected inflation, π.s 18%. What is the first year unemployment rate? %...
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
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A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
Consider an economy with a natural unemployment rate, u, of 4%. The expectations-augmented Phillips curve is Assume that Okun's Law holds so that a 1 percentage point increase in the unemployment rate maintained for one year reduces GDP by 2% of full employment output. Note: Okun's Law can be expressed as: 2( u-u) a. Consider a two-year disinflation. In the first year actual inflation, π' is 14% and expected inflation, π.s 18%. What is the first year unemployment rate? %...
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