If the natural rate of unemployment is 10% and 6% of employed workers become unemployed each period,then

Question

Quizplus · Accepted Answer

If the natural rate of unemployment is 10% and 6% of employed workers become unemployed each period, then the outflow from unemployment is the difference between those who leave unemployment and the total number of unemployed. Since the natural rate of unemployment is 10%, and 6% of employed workers become unemployed, the outflow from unemployment occurs at a rate of 6% - 10% = -4%, which means that 4% of the unemployed remain unemployed each period. Therefore, choice D is correct.

If the Natural Rate of Unemployment Is 10% and 6