In the long run, the unemployment rate is determined primarily by structural features of the labor market.

Question

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Structural features of the labor market, such as the skills and education of the workforce, availability of jobs, and changes in technology and industries, have a significant impact on the long-term unemployment rate. Cyclical factors, such as economic booms and recessions, may cause fluctuations in the short-term, but ultimately it is the structural features that determine the sustained level of unemployment.

In the Long Run, the Unemployment Rate Is Determined Primarily