Chapter 10: Macroeconomic Objectives I: Low Unemployment, Low and Stable Rate of Inflation

1: Explain why structural unemployment might occur in an economy.
2: Explain why a high rate of inflation may negatively affect both a country’s export competitiveness and the level of capital investment by firms.
3: Explain the cause of cyclical (demand-deficient) unemployment.
4: Discuss the view that the most significant consequence of unemployment is the loss of tax revenue for the government.
5: Discuss the view that the most significant impact of high inflation in a country is a loss of export competitiveness.
6: To what extent might unemployment represent an economic and social problem?
7: Distinguish between structural and demand-deficient unemployment.
8: Discuss the view that the problem of unemployment can be reduced through the use of supply-side policies.
9: Using two AD/AS diagrams, explain cost-push and demand-pull inflation.
10: Explain why measuring the rate of inflation using a consumer price index (CPI) may not be accurate.
11: Explain why governments may view deflation as threat.
12: Evaluate the view that a low and stable rate of inflation is beneficial for an economics.
13: Explain why governments may pursue the macroeconomic goals of low inflation and low unemployment.
14: Explain why a country may wish to reduce its rate of inflation.
15: Explain why a country may wish to reduce its unemployment rate.

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