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When an economy is operating at "full employment," as economists usually define the term,

a. Everyone who wants a job has a job.

b. Inflation is a significant problem.

c. The unemployment rate is 4-6 percent.

d. The unemployment rate is 0 percent.

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Mahe Alam
Mahe AlamLv10
28 Sep 2020

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Related questions

According to the text, economists consider full employment to occur when 
 
A. everyone who wants a job has a job. 
B. frictional unemployment equals zero.
C. the sum of frictional unemployment and structural unemployment equals zero. 
D. the unemployment rate consists of only frictional and structural unemployment. 

Answer true or false for each of the following.

1. Most economists want a 0% target for unemployment.

2. The current natural rate of unemployment is thought to be somewhere around 5%.

3. If the economy is above full employment it causes higher than normal unemployment.

4. Inflation can be increased by either an increase in AD or AS.

5. Cyclical unemployment can be caused by a drop in AD or AS.

6. The natural rate of unemployment is associated with high inflation.

7. The core PPI is often used to predict where we are relative to full employment.

8. In a closed economy, inflation represents a decline in average real income.

9. Frictional unemployment is permanent for the labor force, temporary for individuals.

10. It is possible, although unusual, for cyclical unemployment to be negative.

If cyclical unemployment is eliminated in the economy, then

A) the economy is at less than full employment.

B) the unemployment rate is above the natural rate of unemployment.

C) the economy is considered to be at full employment.

D) the unemployment rate is below the natural rate of unemployment.

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