Analyze what the unemployment rate means for the US economy

Expert Solution

Rahul Sunny answered 2 years ago

If the US economy is at the natural rate of unemployment with the level of real...

If the US economy is at the natural rate of unemployment with the level of real GDP at potential output, what would expansionary fiscal or monetary policy do to the economy? How would the economy be effected in the short run and long run? Does the Phillips Curve theory explain what happens?

Unemployment is an indication of the health of the economy. Unemployment means that there is a...

Unemployment is an indication of the health of the economy. Unemployment means that there is a portion of the productive population (labor force) that is not producing and unable to earn income for consumption and/or for investment. The more unemployed workers there are, the less output the economy will be able to produce. High unemployment also means that there are less wages available in the hands of people to consume, which reduces the incentive or need for suppliers to produce...

3. Look up the most recent unemployment rate in the US. Explain what that number means...

3. Look up the most recent unemployment rate in the US. Explain what that number means and whether it might be biased. What types of unemployment are you likely to encounter in a typical economy? Explain with examples.

analyze the unemployment rate and inflation from 2000 - 2010 in the US. discuss the interest...

analyze the unemployment rate and inflation from 2000 - 2010 in the US. discuss the interest rate fluctuations from 2000 - 2010 in the US

Suppose the US economy is in recession. The unemployment rate is 7% and the Federal Reserve...

Suppose the US economy is in recession. The unemployment rate is 7% and the Federal Reserve Bank is considering using monetary policy to expand output. Assume the bank knows, with certainty, that: i. absent changes in monetary policy, unemployment will still be 7% next year; ii. the natural rate of unemployment is 5%; iii. from Okun's law, 1% more output growth for a year leads to a 0.4% reduction in the unemployment rate. Also assume the bank can effectively use...

The US unemployment rate (actual unemployment, u) is 8.4 percent, while the natural rate of unemployment...

The US unemployment rate (actual unemployment, u) is 8.4 percent, while the natural rate of unemployment (nru) is 4.4 percent. (i) Using Okun's Law, compute the US current percentage GDP gap. Show your computation. (ii) State your answer in words, comparing actual to potential output. (iii) Is the US GDP gap positive or negative—and why? Note: "Okun’s Law Arthur Okun was the first macroeconomist to quantify the inverse relationship between the actual unemployment rate and the GDP gap. He noticed...

What does the economy look like during an unemployment gap? What type of unemployment rate is...

What does the economy look like during an unemployment gap? What type of unemployment rate is it compared to the natural rate of unemployment? What about inflation?

Natural Rate of Unemployment #2 a) An economy has had an unemployment rate of 10% for...

Natural Rate of Unemployment #2 a) An economy has had an unemployment rate of 10% for a very long time. 18% of all unemployed workers find a job every month. What share of workers lose their job every month? b) An economy has had an unemployment rate of 5% for a very long time. 3% of all employed workers lose their job every month. What share of unemployed find jobs every month? Natural Rate of Unemployment #3 a) An economy...

When the actual unemployment rate equals the natural rate of unemployment: Multiple Choice the economy has...

When the actual unemployment rate equals the natural rate of unemployment: Multiple Choice the economy has no discouraged workers. the economy is likely in a recession. the economy is only experiencing cyclical unemployment. the economy is at full employment.

If the economy is experiencing 10% inflation rate and a 1% unemployment rate: a. Illustrate the...

If the economy is experiencing 10% inflation rate and a 1% unemployment rate: a. Illustrate the initial condition. That means show the gap on an aggregate demand aggregate/supply graph. b. What specific monetary policy is appropriate according to Keynesian economists? Explain the link from interest rates to aggregate demand carefully. (See figure 16.4, pages 340-341) c. What would be the result of this action? d. what problems could complicate this process?

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