After you have studied Economics in the News on
pp. 694 – 695 , answer the following questions.
a. What are the macroeconomic problems in
the Eurozone economy that the ECB is seeking to address?
b. Is the European unemployment problem
structural, cyclical, or both, and how can we
determine its type?
c. Explain which type of unemployment the
ECB can help with.
d. Use the AS - AD model to show the changes
in aggregate demand and/or aggregate supply
that created the Eurozone’s macroeconomic
problems.
e. Use the AS - AD model to show the changes
in aggregate demand and/or aggregate supply
that the ECB must bring about to achieve its
goal.