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Chapter 19: Q 6. (page 471)

Explain how the natural rate of unemployment may be higher in low-income countries.

Short Answer

Expert verified

Government regulations and subsistence households

Step by step solution

01

Step 1. Define unemployment.

Unemployment refers to people who are willing and able to work but have been unable to find any work.

02

Step 2. Explain rate of unemployment in low-income countries.

Natural rate of unemployment may be higher in low-income countries due to the following reasons:

Due to government regulations

Due to subsistence households

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Most popular questions from this chapter

Retrieve the following data from The World Bank database (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for the most recent year available:

• GDP in constant international dollars or PPP

• Population

• GDP per person in constant international dollars

• Mortality rate, infant (per 1,000 live births)

• Health expenditure per capita (current U.S. dollars)

• Life expectancy at birth, total (years)

Why are inflationary dangers lower in the high-income economies than in low-income and middle-income economies?

Prepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.

Use the Rule of 72 to estimate how long it will take for India, Spain, and South Africa to double their standards of living.

What are the major issues with regard to trade imbalances for low- and middle-income countries?
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