Changes in the natural rate of unemployment are related to changes in the composition of the labor force and to the changes in the productivity of the economy over time.

Question

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The natural rate of unemployment is affected by changes in the labor force composition and productivity. For instance, an increase in the number of discouraged workers who give up on finding jobs causes the natural rate of unemployment to rise, while advancements in technology and education increase the productivity of the economy, lowering the natural rate of unemployment.

Changes in the Natural Rate of Unemployment Are Related to Changes