If the natural rate of unemployment is 5.2 percent and the unemployment gap is -0.8 percent, then the unemployment rate must be

Question

Quizplus · Accepted Answer

The unemployment gap is the difference between the actual unemployment rate and the natural rate of unemployment. 
In this case, the natural rate of unemployment is 5.2 percent and the unemployment gap is given as -0.8 percent. 
So, the actual unemployment rate can be calculated as: 
Actual unemployment rate = natural rate of unemployment + unemployment gap 
= 5.2% + (-0.8%) 
= 4.4%
Therefore, the answer is D, 4.4 percent.

If the Natural Rate of Unemployment Is 5