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Countries face trade-offs between producing consumer goods and producing capital goods. a. Country X takes one hour to produce a unit of consumer goods
Countries face trade-offs between producing consumer goods and producing capital goods. a. Country X takes one hour to produce a unit of consumer goods and two hours to produce a unit of capital goods. Country Y takes two hours to produce a unit of consumer goods and four hours to produce a unit of capital goods. Which country has a comparative advantage in the production of consumer goods? Explain. The following table shows labor-market data for Country X. Employed 180,000 Frictionally unemployed 10,000 Structurally unemployed 5,000 Cyclically unemployed 5,000 Not in the labor force 100,000 b. Calculate the unemployment rate in Country X. Show your work. c. Calculate the labor force participation rate in Country X. Show your work. d. Draw a correctly labeled graph of the production possibilities curve for Country X, with consumer goods on the horizontal axis and capital goods on the vertical axis. Indicate a point on your graph, labeled Z, that reflects the current level of unemployment.
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