When the actual exceeds the natural unemployment rate,this means that we have ________ unemployment.

Question

Quizplus · Accepted Answer

When the actual unemployment rate exceeds the natural rate of unemployment, it means that there is an excess supply of labor (more people looking for jobs than there are job openings) which results in a higher number of unemployed individuals. This type of unemployment is referred to as cyclical unemployment and is caused by economic downturns or recessions. Positive cyclical unemployment means that the actual unemployment rate is higher than the natural rate due to a recession or contraction in the economy.

When the Actual Exceeds the Natural Unemployment Rate,this Means That