If the natural rate of unemployment equals 4 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:
A)−2 percent.
B)10 percent.
C)2 percent.
D)6 percent.

Question

Quizplus · Accepted Answer

Cyclical unemployment is the difference between the actual rate of unemployment (u )and the natural rate of unemployment (u*); in this case 6 − 4 = 2 percent.

If the Natural Rate of Unemployment Equals 4 Percent and the Actual