When macroeconomics refers to "full employment," what do they mean?
a. Full employment occurs when the unemployment rate equals zero.
b. Full employment occurs when there is only frictional unemployment, and all other types of unemployment have been eliminated.
c. Full employment occurs when there is only structural unemployment, and all other types of unemployment have been eliminated.
d. Full employment occurs when there is only frictional unemployment, structural, and cyclical unemployment has been eliminated.
d
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A change in autonomous consumption causes a movement along the aggregate expenditure line, while a change in consumption that depends on income causes a shift of the aggregate expenditure line
a. True b. False
Suppose the population (age 16 and over) of Guatemala is 100 million; 5 million are unemployed, and 70 million hold jobs. The employment/population ratio of Guatemala is
a. 5 percent. b. 65 percent. c. 70 percent. d. 85 percent.
The cost-benefit model used by economists is:
A. useful because everyone follows it all of the time. B. useful because most people follow it most of the time. C. unrealistic because everyone can think of times when he or she violated the principle. D. unrealistic because it is too detailed and specific to apply to most situations.
Which of the scenarios best reflects the meaning of the term inflation targeting?
A) A local shopping mall offers an "inflation discount," which compensates for the recent increase in prices, in the hopes of targeting savvy consumers. B) Hoping to reduce inflation to improve public opinion, the Federal Reserve decides to lower interest rates. C) A central bank is expected to achieve a 3% annual inflation rate. D) In anticipation of the upcoming election, the chairman of the Federal Reserve lowers interest rates, hoping to win support for the incumbent president.