The following table shows data on frictional, cyclical, structural, and total un
ID: 1141042 • Letter: T
Question
The following table shows data on frictional, cyclical, structural, and total unemployment for an economy. Unemployment Type Frictional Cyclical Structural Total Unemployment Rate Percent) 1.75 3.50 6.25 38. According to the above table, Cyclical Unemployment must be equal to a. 0 b. 1.00 C. 1.25 d. 2.00 39. According to the above table, this economy is currently experiencing a. an economic recession b. an economic expansion c. a trough d. There is not enough information to answer this question 40. According to the above table, this economy is currently producing a. above their production possibilities b on their production possibilities frontier c. below the production possibilities frontier d. There is not enough information to answer this question.Explanation / Answer
38.
Cyclical unemployment
= total unemployment - frictional unemployment - structural unemployment
=6.25-1.75-3.50
=1.0
Hence option b is the correct answer.
39.
Since natural level of unemployment = frictional + structural unemployment
=1.75+3.50
=5.25 %
Total unemployment =6.25%
Since total unemployment > natural rate of unemployment, Hence there is recessionary gap. It means there is economic recession in the economy.
Hence option a is the correct answer.
40.
Since the production possibility can be defined as a line which is summation of different combinations of two different goods which can be produced with the available resources by using it efficiently. If the resource are not fully utilised/underutilised, then the economy is producing under the PPF.
Since there is more than the natural level of unemployment in the economy, so it means economy is producing below the PPF.
Hence option C is the correct answer.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.