Question

In: Economics

1. When actual unemployment is higher than its natural rate a. the economy is producing above...

1. When actual unemployment is higher than its natural rate

a. the economy is producing above its long-run capabilities.

b. the economy is producing at its long-run capabilities.

c. resources are employed at levels that are not sustainable in the long run.

d. output is lower than full-employment output.

2. The invention of new technology has increased ________ unemployment.

a. structural d. frictional

b. cyclical e. seasonal

c. discouraged

3. When actual unemployment is higher than its natural rate

a. the economy is producing above its long-run capabilities.

b. the economy is producing at its long-run capabilities.

c. resources are employed at levels that are not sustainable in the long run.

d. output is lower than full-employment output.

Expert Solution

1) Option "d"is correct i.e output is lower then full employment of output

When the economy is at full employment, real GDP = potential real GDP.

By contrast, when the economy is below full employment, the unemployment rate is higher than the natural unemployment rate and real GDP is less than potential Real GDP

2) Option "a"is correct i.e structural unemployment

Structural unemployment refers to the unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand, these are examole of structural unemployment.

3) Option "d"is correct i.e output is lower then full employment of output

When the economy is at full employment, real GDP = potential real GDP.

By contrast, when the economy is below full employment, the unemployment rate is higher than the natural unemployment rate and real GDP is less than potential Real GDP

For any query please comment and please upvote

Rahul Sunny answered 2 years ago

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