If the unemployment rate in an economy is 12%, of which 5% is cyclical unemployment, 4% is structural unemployment, and 3% is frictional unemployment, what is the natural rate of unemployment?
What will be an ideal response?
The natural rate of unemployment is equal to frictional unemployment plus structural unemployment, so the natural rate of unemployment is: (4% + 3%) = 7%.
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Consider the demand curves for soft drinks shown in the figure above. Initially the economy is at point a. If people come to expect that the price of a soft drink will increase in the future, there will be a movement to a point such as
A) none of the points illustrated. B) b. C) c. D) d.
Pete is a perfectly competitive rose grower. The above table gives quantities and the price for which Pete can sell his roses
a) What is Pete's total revenue if he sells 1 dozen roses? 2 dozen roses? 3 dozen roses? 4 dozen roses? b) What is the marginal revenue of the 2nd dozen roses sold? Of the 3rd dozen? Of the 4th dozen?
In order to reduce risk and increase the safety of financial institutions, commercial banks and other depository institutions are prohibited from
A) owning municipal bonds. B) making real estate loans. C) making personal loans. D) owning common stock.
Entrepreneurs are
a. profit-seeking decision makers who decide which business projects to undertake. b. people who loan money to other business decision makers. c. managers who generally work for a salary because they are unwilling to take risks. d. none of the above.