Explain what economists mean by full employment and why this rate of unemployment is not zero
What will be an ideal response?
Full employment occurs in the macro economy when cyclical unemployment is zero. The full-employment rate of unemployment is then made up of the frictional rate of unemployment and the structural rate of unemployment. Because it will always take time to find a job, frictional unemployment will never be zero. Also because demand and technology are constantly changing in an economy, structural unemployment will never be zero. That is, some workers will always lose their jobs as the demands for the products they make fall or disappear entirely.
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Which of the following countries had double-digit inflation for most of the years from 2000 to 2010?
a. India b. Iran c. Italy d. Iraq
Government purchases include spending on goods and services by
a. the federal government only. b. state and federal governments only. c. local, state and federal governments. d. local, state and federal governments, as well household spending by employees of those governments.
A consumer cannot gain consumer’s surplus if she purchases more than one unit of a good.
Answer the following statement true (T) or false (F)
The real exchange rate is:
A) how much of a foreign currency you can buy with the domestic currency. B) foreign CPI divided by the domestic CPI. C) the price of foreign goods in terms of domestic goods. D) the price of foreign goods in dollars. E) the domestic currency divided by the price level.