hort Answers

Please answer 4out of the5 questions below.

When asked to list , give short but factual answers. Use technical terms. Graded on the quality of your answers

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1. "Interest rates are generally low today. If you notice in the next couple of months that they are going up, what 2 things may be happening in the economy? List them ,make connections in your statement clear.

2. " It makes a difference in terms of economic effects WHO the government borrows from" Why is this true?Give three examples.

3. During a recession, Is itbetter to use Business Taxes as a fiscal policy toolorto use Unemployment Compensation as afiscal policy tool?List 3 convincing arguments, one must be about 'uncontrollables'.

4. By December 2010 the unemployment rate was still at 9%, the mpc= 0.6 and the current equilibrium was $11,250 billion. If Full employment Yfwas $13,500 billion , calculate the recessionary gap. Show method.

5. Consider the graph below. Which of the following types of unemployment had the largest impact on the unemployment rate from 1981 - 1982 ?

a. structuralb. inducedc. frictionald. cyclical-Explain one way this type can affect the economy use 'cyclical' or 'structural' budget in your explanation.