In a country with a working-age population of 22 million, 16 million are employed, 2 million are unemployed, and 1 million of the employed are working part-time, half of whom wish to work full-time. If 500,000 of those unemployed are cyclically unemployed, what is the natural unemployment rate?
A) 9.4 percent
B) 11.1 percent
C) 5.6 percent
D) 8.3 percent
E) none of the above
D) 8.3 percent
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Trade theorists have proven that the gains from international trade
A) must raise the economic welfare of every country engaged in trade. B) must raise the economic welfare of everyone in every country engaged in trade. C) must harm owners of "specific" factors of production. D) will always help "winners" by an amount exceeding the losses of "losers." E) usually outweigh the benefits of protectionist policies.
A measure of the responsiveness of demand to changes in income, all other things being constant, is
A) income elasticity of demand. B) price income elasticity of demand. C) price elasticity of demand. D) cross price elasticity of demand.
Suppose the price elasticity of demand for tacos is 0.80. If the price of tacos increases by 10 percent, then the quantity demanded of tacos should, ceteris paribus:
a) Decrease by 8 percent. b) Decrease by 1.25 percent. c) Increase by 8 percent. d) Increase by 1.25 percent.
Refer to the diagram. If the initial aggregate demand and supply curves are AD 0 and AS 0 , the equilibrium price level and level of real domestic output will be:
A. F and C, respectively.
B. G and B, respectively.
C. F and A, respectively.
D. E and B, respectively.