Describe two ways that public policy could reduce the natural rate of unemployment
Since one source of unemployment is the time required to search for job information, any program that increases search time will increase the natural rate of unemployment. To reduce the natural rate of unemployment, the government could reduce the size or duration of unemployment compensation. Another source of unemployment is the minimum wage law, which prevents employers from paying market wages to lower skilled workers. A reduction in the minimum wage for new workers or workers in training would reduce the natural rate of unemployment.
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What is true for both a monopolist and a perfect competitor?
A. Both maximize profits by producing where MR = MC. B. Both have prices that are greater than marginal revenue C. Both minimize average total cost. D. Both face downward-sloping demand curve.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model? a. Real GDP rises and nominal value
of the domestic currency falls. b. Real GDP falls and nominal value of the domestic currency remains the same. c. Real GDP rises and nominal value of the domestic currency remains the same. d. Real GDP rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
A lender obtains funds from depositors by offering short-term interest rates on savings accounts. The lender uses these funds to make longer-term installment loans. Explain how the lender might make use of the futures market to hedge the risk taken.
What will be an ideal response?
The use of a credit card is most similar to:
A. Paying with a check B. An ACH (automatic clearinghouse) transaction C. Purchasing a certificate of deposit D. Obtaining a short-term loan