2. Answer True or False for each of the following. Most economists want a 0% tar
ID: 1168479 • Letter: 2
Question
2. Answer True or False for each of the following.
Most economists want a 0% target for unemployment.
The current natural rate of unemployment is thought to be somewhere around 5%.
If the economy is above full employment it causes higher than normal unemployment.
Inflation can be increased by either an increase in AD or AS.
Cyclical unemployment can be caused by a drop in AD or AS.
The natural rate of unemployment is associated with high inflation.
The core PPI is often used to predict where we are relative to full employment.
In a closed economy, inflation represents a decline in average real income.
Frictional unemployment is permanent for the labor force, temporary for individuals.
It is possible, although unusual, for cyclical unemployment to be negative.
Please dnt give me wrong answers like last week. I will give you negative rating if i fail because of you.
Explanation / Answer
0% unemployment is not ideal level unemployment for any economy. There is always trade off between unemployment and inflation. The lower the unemployment rate the higher is the inflation. Hence the statement is false that economists want 0% unemployment.
True the current rate of natural unemployment si around 5%
If the economy is above full employment level it first causes inflation and then unemployment above normal. True.
False.Inflation is caused only increased aggregate demand(AD) . If AS increases, there is always deflation.
TRUE.Cyclical unemployment is the unemployment due to changes in business cycle. It can be due to Aggreagte demand change (ADD) or aggregate supply change (AS) .
FALSE. NAtural rate of unemployment ahs ideal level of inflation.
False .PPI is used to assess finished goods.
True,. Inflation always reduces the real value of any thing.
False. Frictional unemployemnt is the unemployment due to job switch or time taken to find new job. It can be with individual or labor force or both.
True.Cyclical unemployement canbe negative at times of boom.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.