If the Natural Rate of Unemployment Equals 6% and the Actual

question 59

Multiple Choice

If the natural rate of unemployment equals 6% and the actual rate of unemployment equals 4%,then cyclical unemployment equals

• A) - 2%.
• B) 0%.
• C) 2%.
• D) 6%.
• E) 10%.

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Definitions:

Law of One Price

The economic theory that states that in efficient markets, identical goods should have only one price.

Price Ceiling

A legal maximum on the price at which a good can be sold.

Exchange Rates

The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another currency.

Net Exports

The difference between a nation's total exports and its total imports.