Why does the term full employment imply an unemployment rate greater than zero? Discuss your answer in terms of the types of unemployment
Full employment implies an unemployment rate greater than zero because some types of unemployment are unavoidable. Frictional unemployment always tends to exist as individuals move to different jobs and move to different locations. Structural unemployment is also quite common as advances in technology and changes in the types of goods produced reduce the need for workers in specific industries or specific positions.
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Describe the process of "creative destruction" using a specific example
What will be an ideal response?
Although reserve requirements and the discount rate are not actually set by the ________, decisions concerning these policy tools are effectively made there
A) Federal Reserve Bank of New York B) Board of Governors C) Federal Open Market Committee D) Federal Reserve Banks
What characteristic is common to perfect competition, monopolistic competition, and monopoly?
a. free entry and exit b. zero economic profit in the long run c. firms treat the market price as given d. firms maximize profits by producing where MR = MC e. small number of buyers relative to the number of sellers
There exist only two causes of monopoly: barriers to entry and government restrictions.
Answer the following statement true (T) or false (F)