9:18 45, unemployment is/are always peesent in a dymamic b Frictional e Seasonal

Question

9:18 45, unemployment is/are always peesent in a dymamic b Frictional e Seasonal fritional, and snutu 46. Inflation is defined as erage level o d an increase in the prices of specif prodacts 47. f the price level for a given year was 1.333, then the real value of SI would be Table 1 48. In Table 1, what was the purchasing power of the dollar in 2005 relative to the base year 2002 (rounded to two decimal places)? e. None of tese 49. Refer to Table 1 Between 2003 and 2004, the annual inflation rate was b. 2.5 pmont 50. The real interest rate equals the of expocted nation e. nominal interes e mins the rale of expocted intion 1. Suppose Jeremy borrows $100 from Mike, at an interest rate , of 7%. If the inflation rate over the year turns out to be 5%, 01 which of the follow The noesinal rale ofi

Explanation / Answer

(45) (d)

Unemployment always includes frictional and structural unemployment.

(46) (b)

Inflation is a sustained rise in the aggregate (average) price level.

(47) (d)

Real value = Nominal value / Price level = $1 / 1.333 = $0.75

(48) (d)

Purchasing poweer = $(1.093 - 1) = $0.093 ~ $0.09

(49) (a)

Inflation Rate = % Increase in price level = (1.064 / 1.039) - 1 = 1.024 - 1 = 0.024 = 2.4%

(50) (d)

For any variable, Real rate = Nominal rate - Inflation rate

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