Explain the difference between frictional and structural unemployment
What will be an ideal response?
Frictional unemployment is more short term and is associated with people changing jobs and entering the labor force. Structural unemployment is more long term and is associated with changes in the structure of the economy that require people to learn new skills.
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Why are forward contracts typically illiquid?
What will be an ideal response?
Tax incidence refers to
A) determining who sends the taxes into the government. B) the tendency of some people to avoid paying taxes at all. C) the distribution of tax burdens among groups, or who really pays a tax. D) determining the marginal tax rate applied to any increase in income.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
A decrease in the money supply would cause the IS curve to ________ and the LM curve to ________.
A. shift down and to the left; shift up and to the left B. be unchanged; shift up and to the left C. shift down and to the left; be unchanged D. be unchanged; shift down and to the right