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# Solutions for Chapter Module 12 : The Meaning and Calculation of Unemployment

## Full solutions for Krugman's Economics for AP* | 2nd Edition

ISBN: 9781429218276

Solutions for Chapter Module 12 : The Meaning and Calculation of Unemployment

Solutions for Chapter Module 12
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##### ISBN: 9781429218276

This expansive textbook survival guide covers the following chapters and their solutions. Chapter Module 12 : The Meaning and Calculation of Unemployment includes 5 full step-by-step solutions. This textbook survival guide was created for the textbook: Krugman's Economics for AP*, edition: 2. Since 5 problems in chapter Module 12 : The Meaning and Calculation of Unemployment have been answered, more than 2270 students have viewed full step-by-step solutions from this chapter. Krugman's Economics for AP* was written by and is associated to the ISBN: 9781429218276.

Key Business Terms and definitions covered in this textbook
• Arrow’s impossibility theorem

a mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences

• average total cost

total cost divided by the quantity of output

• compensating differential

a difference in wages that arises to offset the nonmonetary characteristics of different jobs

• complements

two goods for which an increase in the price of one leads to a decrease in the demand for the other

• constant returns to scale

The property whereby long-run average total cost stays the same as the quantity of output changes

• diminishing marginal product

the property whereby the marginal product of an input declines as the quantity of the input increases

• economics

the study of how society manages its scarce resources

• fractional-reserve banking

a banking system in which banks hold only a fraction of deposits as reserves

• GDP deflator

a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100

• income elasticity of demand

a measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income

• leverage

the use of borrowed money to supplement existing funds for purposes of investment

• poverty rate

the percentage of the population whose family income falls below an absolute level called the poverty line

• price ceiling

a legal maximum on the price at which a good can be sold

• private goods

goods that are both excludable and rival in consumption

• progressive tax

a tax for which highincome taxpayers pay a larger fraction of their income than do low-income taxpayers

• quantity supplied

the amount of a good that sellers are willing and able to sell

• screening

an action taken by an uninformed party to induce an informed party to reveal information

• substitution effect

the change in consumption that results when a price change moves the consumer along a given indifference curve to a point with a new marginal rate of substitution

• value of the marginal product

the marginal product of an input times the price of the output

• world price

the price of a good that prevails in the world market for that good

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