Economists in Olliestan estimate the natural rate of unemployment is 7 percent. If the official unemployment rate is 5 percent, cyclical unemployment is negative.

Question

Quizplus · Accepted Answer

If the natural rate of unemployment is 7 percent and the official unemployment rate is 5 percent, then there is still a 2 percent gap, indicating that there is still some cyclical unemployment present. Therefore, cyclical unemployment cannot be negative.

Economists in Olliestan Estimate the Natural Rate of Unemployment Is