“The economic cost of unemployment is measured by the GDP gap.” Explain this statement.
What will be an ideal response?
When there are unemployed resources, potential production of goods and services is irretrievably lost. This is the economic cost of unemployment and the lost production is known as the GDP gap. Of course, there is a more direct economic cost to those who find themselves unemployed and an additional cost to taxpayers for the support programs available to the unemployed.
You might also like to view...
When calculating real GDP, the reference base year
A) allows us to account for changes in GNP compared to GDP. B) always reduces the value of GDP compared to GNP. C) allows us to calculate the value of the goods and services in terms of prices of that base year. D) usually increases the value of GNP compared to GDP. E) allows us to increase the value of goods and services.
Technological efficiency occurs when it is not possible for a firm to get more output from the inputs it is currently using
Indicate whether the statement is true or false
According to the liquidity premium theory
A) investors prefer longer to shorter maturities. B) investors prefer shorter to longer maturities. C) investors are indifferent between short and long maturities. D) investors are more interested in the tax treatment of bonds than they are in the liquidity of bonds.
A bank is said to be recapitalized when some investor, private or government, provides new equity capital in return for partial ownership.
Answer the following statement true (T) or false (F)