During the recession of 2008-2009, 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 associated with the ups and downs of the economy, particularly recessions and expansions. The natural rate of unemployment, however, is considered to be the level of unemployment that the economy achieves in the long run, reflecting structural and frictional unemployment but not cyclical. Therefore, changes in cyclical unemployment due to economic fluctuations, like the recession of 2008-2009, do not affect the natural rate of unemployment.

During the Recession of 2008-2009, Cyclical Unemployment Increased as the Recession