Unemployment that results from an economy-wide downturn is ...

[bobbie]

Unemployment that results from an economy-wide downturn is called:
 a. frictional unemployment.
  b. cyclical unemployment.
 c. structural unemployment.
  d. seasonal unemployment.

Question 2

Under a system of fixed exchange rates, what will happen if the price of a currency is set above market equilibrium? How can this be remedied?

[parker125]

Answer to Question 1

b

Answer to Question 2

A nation whose currency is overvalued will consistently import more than it exports, leading to a loss of currency reserves. To prevent this, the country can devalue its currency, adopt tariffs and quotas, or follow restrictive macroeconomic policy to promote deflation and higher interest rates.