During the Great Depression,cyclical unemployment increased as the recession continued.This increase in cyclical unemployment
A)increased the natural rate of unemployment.
B)decreased the natural rate of unemployment.
C)had no effect on the natural rate of unemployment.
D)could have increased or decreased the natural rate of unemployment.

Question

Quizplus · Accepted Answer

Cyclical unemployment is directly related to the macroeconomic situation of an economy, such as a recession or a depression, and varies with the business cycle. The natural rate of unemployment, however, is determined by structural factors in the labor market, such as market inefficiencies, and is not affected by short-term cyclical fluctuations. Therefore, an increase in cyclical unemployment during the Great Depression would not have affected the natural rate of unemployment.

During the Great Depression,cyclical Unemployment Increased as the Recession Continued