This topic contains a solution. Click here to go to the answer

Author Question: In the 1970s, savings and loan associations primarily earned their income from extending fixed-rate ... (Read 772 times)

jon_i

  • Hero Member
  • *****
  • Posts: 549
In the 1970s, savings and loan associations primarily earned their income from extending fixed-rate home loans. They extended many of these loans in the early 1970s when inflation was low. Were the savings and loans winners or losers as inflation skyrocketed in the late 1970s?

Question 2

What are the three major types of unemployment? What are their causes?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

vkodali

  • Sr. Member
  • ****
  • Posts: 357
Answer to Question 1

The savings and loan associations were big losers. Those who lend at fixed interest rates lose when there is unanticipated inflation. The S&Ls extended loans at relatively low nominal interest rates compared to what was charged for loans in the late 1970s. The S&L loans were repaid in dollars that had far less purchasing power than at the time the loans were extended.

Answer to Question 2

The first is frictional unemployment. Persons who are between jobs as they move from one position to another, can be considered frictionally unemployed. Frictionally unemployed persons generally find work relatively quickly. Since some normal movement between jobs is acceptable, economists don't worry much about frictional unemployment.

The second type of unemployment is structural unemployment in which persons have lost jobs because of a change in the structure of the economy, such that certain jobs have been eliminated. Structurally unemployed persons are less likely to find another job in less time than a frictionally unemployed person. An example of a structurally unemployed person is a middle manager at a large corporation who loses her job when the company downsizes.

Cyclical unemployment, which arises when the level of economic activity declines, is the third type of unemployment. If the economy operates at less than full employment, cyclical unemployment will exist. The usual cure for cyclical unemployment is an increase in output, which requires more labor to produce it.




jon_i

  • Member
  • Posts: 549
Reply 2 on: Jun 30, 2018
:D TYSM


xthemafja

  • Member
  • Posts: 348
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates’s recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

Thyroid conditions may make getting pregnant impossible.

Did you know?

The most destructive flu epidemic of all times in recorded history occurred in 1918, with approximately 20 million deaths worldwide.

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

For a complete list of videos, visit our video library