Explain the difference between macroeconomic variables that are in terms of levels and growth rates. Which important macroeconomic variables are which? Which one is the unemployment rate?
What will be an ideal response?
Variables such as GDP and the price level are in terms of levels. Inflation and GDP growth are in terms of growth rates, meaning that they are measured between two different points in time. Unemployment rates are a percentage, but the unemployment rate is not a growth rate because it is not measured over time.
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In terms of capabilities, education can be seen as:
A. contributing to better family planning. B. a factor that reduces income inequality in countries. C. a feature of more democratic regimes. D. something that requires a lot of funding, but produces very little return.
When you pay off a loan at a bank, the money supply becomes smaller.
Answer the following statement true (T) or false (F)
For Keynes, the most important determinant of employment and output is/are
A. interest rates. B. aggregate supply. C. aggregate demand. D. the level of inventories.
If domestic savings is less than domestic investment, then
A) reserve assets will increase. B) the government runs a budget deficit. C) there will be negative foreign investment. D) a trade surplus must result.