What is meant by the natural rate of unemployment?
It is the rate of unemployment that the economy moves to in the long run.
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Refer to the below graphs. (Assume that the pre-migration labor force in Country A is 0d and that it is 0u in country B.) Domestic output in country A will, after the immigration:
A. Decrease by area abc
B. Decrease by area adec
C. Increase by area abc
D. Increase by area adec
Someone who earns her living rolling out pizza dough
A) is inefficiently employed if she could shift to another occupation and produce more than the person she replaces. B) is inefficiently employed if someone else could roll out more dough in less time. C) thinks she has a comparative advantage in rolling out pizza dough. D) All of the above are true.
Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5.5 percent. We can conclude that
A) the output gap is negative. B) the output gap equals zero. C) the output gap is positive. D) we have mismeasured the natural unemployment rate.
The cost of risk is the same for everyone
Indicate whether the statement is true or false