Suppose the NAIRU in April, 2010 is 7.2 percent. If the actual unemployment rate is 8.1 percent, then
A) there is an inflationary gap.
B) the NAIRU has increased by 0.9 percentage points.
C) 0.9 percentage points are due to cyclical factors.
D) the sum of frictional and structural unemployment is greater than the NAIRU.
E) cyclical unemployment is 8.1 percent.
Correct Answer:
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