In a country with a working-age population of 30 million, 18 million are employed, 2 million are unemployed, and 2 million of the employed are working part-time, half of whom wish to work full-time. If 1 million of those unemployed are cyclically unemployed, what is the natural unemployment rate?
A) 5 percent
B) 11.1 percent
C) 5.6 percent
D) 6.7 percent
E) none of the above
A) 5 percent
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Information costs
A) are the costs of buying and selling financial claims. B) include the costs that savers incur to determine the credit worthiness of borrowers. C) include the costs borrowers incur to discover the best investments to make with the money they have borrowed. D) are zero in financial markets, but high for transactions carried out through financial intermediaries.
Policies that make it more difficult to fire an employee likely lead to:
A. greater unemployment, because employers will be more hesitant to hire someone. B. greater unemployment, because employees will quit more often. C. less unemployment, because everyone will value their job more. D. less unemployment, because employers will not be able to fire as many people.
If traveler's checks were $1000 higher and saving deposits were $500 higher, M1 would be
a. $500 higher and M2 would be $1,500 higher. b. $1,000 higher and M2 would be $1,500 higher. c. M2 and M1 would be $1,500 higher. d. $1,000 high and M2 would be $500 higher.
Which one of the following is NOT a government failure?
A. The "bridge to nowhere" in Alaska B. The FEMA reaction to Hurricane Katrina C. Allowing federal budget deficits to be financed by foreigners while calling for further tax cuts to help incumbent politicians get reelected D. Water pollution