The economy of the country of Stewarton has a structural unemployment rate of 2 percent, a frictional unemployment rate of 3 percent, and a cyclical unemployment rate of 2 percent (because the economy is in a recession). If there is no seasonal unemployment, then what is the natural rate of unemployment for Stewarton?

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the sum of structural and frictional unemployment rates, which in this case is 2 percent + 3 percent = 5 percent.

The Economy of the Country of Stewarton Has a Structural