After you have studied Economics in the News on pp. 694 – 695 , answer the following questions.
a. What are the macroeconomic problems in the Eurozone economy that the ECB is seeking to address?
b. Is the European unemployment problem structural, cyclical, or both, and how can we determine its type?
c. Explain which type of unemployment the ECB can help with.
d. Use the AS - AD model to show the changes in aggregate demand and/or aggregate supply that created the Eurozone’s macroeconomic problems.
e. Use the AS - AD model to show the changes in aggregate demand and/or aggregate supply that the ECB must bring about to achieve its goal.