When an economy is operating at "full employment," as economists usually define the term,
A. The unemployment rate is 4-6 percent.
B. Everyone who wants a job has a job.
C. The unemployment rate is 0 percent.
D. Inflation is a significant problem.
Answer: A
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Answer the following statement true (T) or false (F)
Total fixed cost falls as output expands.
Answer the following statement true (T) or false (F)
In the New Keynesian model, if there is a decrease in anticipated future total factor productivity, then
A) there should be no change in monetary or fiscal policy. B) the central bank's interest rate target should be increased. C) government spending should fall, and the central bank's interest rate target should rise. D) government spending should increase.
In the most basic model presented in the text, when aggregate expenditures cross the 45-degree line,
a. saving equals intended investment b. saving is greater than intended investment c. saving is less than intended investment d. saving equals consumption e. saving equals inventories