When cyclical unemployment increases and other things remain the same,
A) the natural unemployment rate increases.
B) the amount of frictional unemployment increases.
C) the amount of structural unemployment decreases.
D) the natural unemployment rate does not change.

Question

Quizplus · Accepted Answer

Cyclical unemployment is associated with the ups and downs of the economy, whereas the natural unemployment rate includes only frictional and structural unemployment, which are not affected by economic cycles. Thus, an increase in cyclical unemployment does not change the natural unemployment rate.

When Cyclical Unemployment Increases and Other Things Remain the Same