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Questions: a. What is the relationship between the natural rate of unemployment and frictional, structural, and cyclical unemployment?
b. What would happen to both unemployment and the normal rate of unemployment if:
i. cyclical unemployment increases.
ii. frictional unemployment increases.
iii. structural unemployment falls and cyclical unemployment rises by the same amount.
iv. structural unemployment increases and cyclical unemployment decreases by a larger amount.
v. frictional unemployment decreases and structural unemployment increases by the same amount.
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Problem based on Utility Function - Problem, Answer and explain the following using a diagram which is completely labeled.
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Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.
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