The idea that the natural rate of unemployment is increased following extended periods of unemployment is called:
A)Okun's law.
B)the Phillips curve.
C)the natural-rate hypothesis.
D)hysteresis.

Question

Quizplus · Accepted Answer

Hysteresis refers to the phenomenon where the natural rate of unemployment increases after prolonged periods of high unemployment, as skills deteriorate and workers become less employable.

The Idea That the Natural Rate of Unemployment Is Increased