If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:
A)11 percent.
B)1.2 percent.
C)1 percent.
D)−1 percent.

Question

Quizplus · Accepted Answer

Cyclical unemployment is the difference between the actual rate of unemployment (u )and the natural rate of unemployment (u*); in this case 6 − 5 = 1 percent.

If the Natural Rate of Unemployment Equals 5 Percent and the Actual