Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that

Question

Quizplus · Accepted Answer

The natural unemployment rate represents the amount of unemployment that exists even when the economy is at full employment, which is usually attributed to frictional and structural factors. Therefore, the fact that the current unemployment rate is higher than the natural rate suggests that full employment is not occurring and there is at least some cyclical unemployment.

Suppose the Natural Unemployment Rate Equals 6 Percent and the Current