Describe the relationship between the unemployment rate and the natural unemployment rate as the output gap futuates between being positive and being negative When the output gap is positive. the unemployment rate the natural unemployment rate When the output gap is negative, the unemployment rate the natural unemployment rate OA is greater than, is less than OB is less than is greater than OC. is less than equals OD. equals is greater than OE sgreater than equals

Describe the relationship between the unemployment rate and the natural unemployment rate as the output gap futuates between being positive and being negative When the output gap is positive. the unemployment rate the natural unemployment rate When the output gap is negative, the unemployment rate the natural unemployment rate OA is greater than, is less than OB is less than is greater than OC. is less than equals OD. equals is greater than OE sgreater than equals

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 7P

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Similar questions

Are U.S. unemployment rates distributed evenly across the population?
Unemployment rates have been higher in many European countries in recent decades than in the United States. Is the main reason for this long-term difference in unemployment rates more likely to be cyclical unemployment or the natural rate of unemployment? Explain briefly.
While unemployment is highly negatively correlated with the level of economic activity, in the real world it responds with a lag. In other wands, firms do not immediately lay off workers in response to a sales decline. They wait a while before responding. Similarly, firms do not immediately hire workers when sales pick up. What do you think accounts for the lag in response time?
What is frictional unemployment? Give examples of frictional unemployment.
A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest 0f the adult population is out of the labor force. Whats the unemployment rate? What share of population is in the labor force? Sketch a pie chart that divides the adult population into these three groups.
Is it desirable to eliminate natural unemployment? Why or why not? Hint: Think about what our economy would look like today and what assumptions would have to be met to have a zero rate of natural unemployment.