At the peak of a business cycle, the
A) cyclical unemployment rate is positive.
B) unemployment rate is above the natural unemployment rate.
C) frictional unemployment rate is zero.
D) unemployment rate is below the natural unemployment rate.
E) natural unemployment rate is negative.
Question 2
If the marginal external cost of building a children's playground equals zero, then the i. marginal private cost equals the marginal social cost. ii. marginal social cost equals zero. iii. marginal private cost equals zero.
A) i only
B) ii only
C) iii only
D) ii and iii
E) i and ii
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