Chapter 7: Q12 - Problems (page 142)
The real interest rate is 4 percent, and the nominal interest is 6 percent. What is the anticipated rate of inflation.
Inflation
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Suppose that among the 15 million unemployed people in Problem 7-17, currently, 6.9 million are frictionally unemployed, 5.9 million are cyclically unemployed, and 2.2 million are structurally unemployed. What is the natural rate of unemployment?
Suppose you are given the following information:
a. What is the total population?
b. How many people are unemployed, and what is the unemployment rate?
c. What is the labour force participation rate?
Evaluate who loses and who gains from inflation and distinguish between nominal and real interest rates
How might government policies that make it more difficult for businesses to fire workers cause those businesses to consider more carefully and hence more slowly -whom they hire for positions in the first place? Explain your reasoning.
Why do you suppose that some economists argue that if part-time employment rises while unemployment remains unchanged, the economy has moved further from full employment?
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