Suppose the NAIRU in April,2015 is 7.2%.If the actual unemployment rate is 8.1%,then

Question

Quizplus · Accepted Answer

The difference between the actual unemployment rate and the NAIRU (8.1% - 7.2% = 0.9%) is known as the cyclical unemployment rate. Therefore, choice B is the correct answer. Choices A and E are incorrect because there is no information provided to suggest that the economy is experiencing inflation or that all of the unemployment is cyclical. Choice C is incorrect because we cannot make any conclusions about the sum of frictional and structural unemployment without additional information. Choice D is incorrect because we cannot make any conclusions about changes in the NAIRU without additional information.

Suppose the NAIRU in April,2015 Is 7