An increase in the rate of aggregate economic growth usually speeds up the rate of change in the structure of labour demand.As a result,we can expect that structural unemployment will ________,and will therefore cause the NAIRU to ________.

Question

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An increase in the rate of aggregate economic growth leads to speed up the rate of change in the structure of labour demand. This means the demand for certain types of labor will increase while for some, it will decrease. As a result, structural unemployment will increase, and it will cause the NAIRU (Non-Accelerating Inflation Rate of Unemployment) to increase. NAIRU refers to the unemployment rate at which the inflation rate is stable, so an increase in NAIRU means inflation rate will also increase.

An Increase in the Rate of Aggregate Economic Growth Usually