Author Question: How might the increase in the natural rate of unemployment in Europe be related to the increase in ... (Read 122 times)

anshika · **on:** Jun 30, 2018

How might the increase in the natural rate of unemployment in Europe be related to the increase in income inequality in the United States?

What will be an ideal response?

Question 2

What is the most direct method the Fed uses to change the monetary base?

A) open market operations
B) changing the required reserve ratio
C) changing the federal funds rate
D) changing the level of discount loans

alexanderhamilton · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The link is the skill-biased technical change that occurred in the 1980s and 90s. The result in Europe was that unskilled workers came to rely increasingly on government benefits and work rules. The result in the U.S. is that unskilled workers have stagnant real income and deteriorating job prospects, unless they are able to access the educational path to skilled employment.

Answer to Question 2

A