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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If expectations are formed adaptively, then people
A) use more information than just past data on a single variable to form their expectations of that variable. B) often change their expectations quickly when faced with new information. C) use only the information from past data on a single variable to form their expectations of that variable. D) never change their expectations once they have been made.
Firms can acquire access to savings directly ________
A) by issuing securities B) through the payment of taxes to the federal government C) by borrowing from banks D) through the depositing of funds in depository institutions
Someone who is deemed irrational from an economic standpoint is someone who
a. voluntarily partakes in actions contrary to his personal preferences. b. voluntarily partakes in actions contrary to what society deems acceptable. c. voluntarily partakes in actions that the majority of consumers would not. d. sets prices at ninety-nine cents.
The trade-off of saving the spotted owls in the Pacific Northwest was
A. the loss of logging activities by lumber companies. B. the loss of salmon in the region. C. the increase in the number of marbled murrelets. D. none.