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Author Question: When the unemployment rate _________ the natural unemployment rate, real GDP is _________ potential ... (Read 117 times)

bobbie

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on: Jun 29, 2018
When the unemployment rate _________ the natural unemployment rate, real GDP is _________ potential GDP and the output gap is _________.
 
  A. exceeds; below; negative
  B. is below; below; negative
  C. exceeds; above; positive
  D. is below; above; negative

Question 2

Explain the optimal strategy that a price discriminating firm would use when pricing in markets with different elasticities.
 
  What will be an ideal response?


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vickyvicksss

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A When the unemployment rate exceeds the natural unem-ployment rate, the economy is in a recession with real GDP is less than potential GDP so the output gap is negative.

Answer to Question 2

The optimal strategy for a firm that can sell in more than one market is to charge higher prices in markets with low demand elasticities and vice versa.


bobbie

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Reply 2 on: Jun 29, 2018
Gracias!

jamesnevil303

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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