Chapter 9: Q5. (page 195)
The unemployment rate that is consistent with full employment is __________________.
the natural rate of unemployment
the unnatural rate of unemployment
the status quo rate of unemployment
cyclical unemployment
Okun’s rate of unemployment
Option (a) the natural rate of unemployment
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Suppose that a country has 9 million people working full-time. It also has 1 million people who are actively seeking work but are currently unemployed, along with 2 million discouraged workers who have given up looking for work and are currently unemployed. What is this country’s unemployment rate?
10 per cent
15 per cent
20 per cent
25 per cent
What are the four phases of the business cycle? How long do business cycles last? Why does the business cycle affect output and employment in capital goods industries and consumer durable goods industries more severely than in industries producing consumer nondurables?
Suppose that a country’s annual growth rates were 5, 3, 4, −1, −2, 2, 3, 4, 6, and 3 percent in yearly sequence over a 10-year period. What was the country’s trend rate of growth over this period? Which set of years most clearly demonstrates an expansionary phase of the business cycle? Which set of years best illustrates a recessionary phase of the business cycle?
Suppose that the nominal inflation rate is 4 percent and the inflation premium is 2 percent. What is the real interest rate? Alternatively, assume that the real interest rate is 1 percent and the nominal interest rate is 6 percent. What is the inflation premium?
Cost-push inflation occurs in the presence of __________________.
excess inventory
a trade deficit
rising per-unit production costs
excess demand for goods and services
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