What is full employment? What are the different kinds of unemployment? What constitutes the natural (normal) rate of unemployment?
Full employment exists when approximately 95 percent of the civilian labor force is employed. This implies a natural rate of unemployment of approximately 5 percent. The natural rate of unemployment consists of the frictionally and structurally unemployed. The only other type of unemployment is cyclical unemployment.
You might also like to view...
The average propensity to consume is the
A) percentage of total disposable income consumed. B) ratio of changes in planned consumption to changes in real disposable income. C) rate at which real disposable income changes as planned consumption changes. D) slope of the consumption function.
A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it
a. encourages illegitimate births because single women with children receive higher payments. b. rewards laziness because it provides payments to those with low incomes regardless of their work effort. c. does not help the poor who are unemployed. d. creates unemployment by increasing the wage paid to unskilled workers above the equilibrium wage.