Suppose the measured unemployment rate is 4.5% and the true natural rate of unemployment is 5.1%. What should policymakers do in this situation? Suppose that the chair of the Federal Reserve believes the natural rate of unemployment to be 4.0%
What will the chair of the Fed do in this situation, and will this be a good decision?
If the true natural rate of unemployment is above the measured unemployment rate, this means that policymakers should try to slow the economy. If the chair of the Fed believes the natural rate of unemployment to be below the measured unemployment rate, she will stimulate the economy, which will be a bad decision as the economy may become overstimulated and result in an increase in the inflation rate.
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Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for tuna. Which panel best describes what happens in this market when there is a decrease in the productivity of commercial fishermen?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
The law of diminishing returns applies to which of the following segments of the marginal product of labor curve?
a. The entire curve. b. The downward-sloping segment only. c. The upward sloping segment only. d. The point where labor input is zero.
The relationship in the above figure suggests that when the interest rate is 5 percent
A) a decrease in income will be associated with a decrease in expenditures. B) a decrease in income will be associated with an increase in expenditures. C) an increase in income will be associated with a decrease in expenditures. D) there is no relationship between expenditures and income.
Are tariffs and quotas equivalent in their economic effects? Demonstrate
What will be an ideal response?