The natural rate of unemployment is:
A. higher than the full-employment rate of unemployment.
B. lower than the full-employment rate of unemployment.
C. that rate of unemployment occurring when the economy is at its potential output.
D. found by dividing total unemployment by the size of the labor force.
C. that rate of unemployment occurring when the economy is at its potential output.
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Money's function as a medium of exchange means that
A) money is a common denominator for expressing the prices of goods and services. B) money can be used to store wealth. C) money serves as an acceptable means of payment. D) money requires a double coincidence of wants.
If the unemployment rate in the economy is steady at 4 percent per year, how does the short-run Phillips curve predict that the inflation rate will be changing, if at all? What will happen if the unemployment rate now rises to 7 percent per year?
Assume there are no changes to inflation expectations. Provide an appropriate graph to support your discussion.
Economic theory predicts that people make choices in a manner that
A) makes them well liked by others. B) makes them better off. C) reflects the fact that resources are unlimited. D) shows that they do not respond to monetary incentives.
The difference between gross public debt and net public debt is that
A) net public debt includes interagency borrowing while the gross domestic product debt does not. B) net public debt is expressed in real terms while gross public debt is expressed in nominal terms. C) gross public debt includes interagency borrowing while net public debt does not. D) gross public debt is held by individuals while net public debt is held by the government.