The natural rate of unemployment has increased in the United States and Europe over the last twenty years. What are things that could account for this?
What will be an ideal response?
The natural rate of unemployment is affected by various rigidities. These rigidities include unions, government-imposed licenses, and other restrictions in labor markets, minimum wage laws, and welfare, and unemployment insurance. If these rigidities have become more important, then the labor markets are likely to suffer from greater structural unemployment and the natural rate of unemployment would be greater.
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Of the following, demand is likely to be the least elastic for
A) Ford automobiles. B) Toyota automobiles. C) compact disc players. D) toothpicks.
Over time, the money multiplier:
A. was relatively stable until 2008, when it dropped dramatically. B. was relatively stable until 2008, when it rose dramatically. C. has historically followed the business cycle. D. runs counter cyclic to the business cycle.
Extrapolative expectations work when prices are rising, but not when prices decline.
Answer the following statement true (T) or false (F)
Explain what effect a reduction in future expected output will have on the IS curve and LM curve in the current period
What will be an ideal response?