Suppose the unemployment rate is 8.5 percent and we know that frictional and structural unemployment together account for 5.5 percent. The cyclical unemployment rate is then
A)14 percent.
B)8.5 percent.
C)5.5 percent.
D)3.0 percent.
E)- 3.0 percent.

Question

Quizplus · Accepted Answer

Frictional and structural unemployment account for 5.5 percent of the unemployment rate. Subtracting this from the total unemployment rate of 8.5 percent gives us the cyclical unemployment rate:

Cyclical unemployment rate = 8.5% - 5.5% = 3.0%

Therefore, the correct answer is D, 3.0 percent.

Suppose the Unemployment Rate Is 8