The actual unemployment rate exceeds the natural rate of unemployment. What are policymakers concerned about in this situation?
What will be an ideal response?
If the actual unemployment rate exceeds the natural rate of unemployment, the economy is not operating near its full potential. Policymakers will want to stimulate spending thereby production and employment to move the unemployment rate towards the natural rate.
You might also like to view...
All else equal, compared to small-budget items such as paper towels, the price elasticity of demand for big-ticket items such as refrigerators is ________:
A. equal B. very low C. lower D. higher
After an adverse supply shock occurs, the ____________ curve shifts _____________ resulting in a(n) _________________ in the price level and a(n) ________________ in Real GDP
A) AD; leftward; decrease; decrease B) AD; rightward; increase; increase C) SRAS; rightward; decrease; increase D) SRAS; leftward; increase; decrease
Which of the following is typically NOT an argument used for keeping the U.S. trade embargo with Cuba intact?
A) There is not much economic potential from trade given Cuba's small population and low per capita income. B) Removal of the embargo will cause much more Cuban immigration to the United States. C) If the Cuban economy is weakened just a bit more, the Cuban political-economic system cannot be sustained. D) There will be a backlash among countries supplying such commodities as sugar to the United States if the U.S. buys them from Cuba instead.
One important category of state and local tax spending is ______.
a. Medicare b. Social Security c. police and fire protection d. national defense