If you were president of the United States, what would you do to reduce the natural rate of unemployment? Propose at least three different methods
What will be an ideal response?
Provide support for job training and worker relocation; increase labor-market flexibility by reducing the minimum wage; reform the unemployment insurance system; run a high-pressure economy (if there is hysteresis).
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Suppose there are two countries (Home and Foreign) that produce two goods. Home's wages are 100% greater than Foreign's wages. Will trade be possible between Home and Foreign?
a. No, because Foreign's wages are lower than Home's wages. b. Yes, Foreign will be able to export both products to Home. c. Yes, as long as Home's marginal productivity of labor in one product is at least 100% higher than Foreign's marginal productivity of labor in the same product. d. No, because prices will be the same in each country.
A tariff affects imports
a. by limiting quantity and raising price to a higher level. b. by reducing quantity demanded so that supply falls. c. by increasing supply, raising price, and reducing demand. d. by raising price and reducing quantity demanded.