What happens to the natural rate of unemployment

Reference no: EM13183182

(Natural Rate of Unemployment) What is the relationship between potential output and the natural rate of unemployment?

a. If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment? Where is the economy operating relative to its potential GDP?

b. What happens to the natural rate of unemployment and potential GDP if cyclical unemployment rises to 3 percent with other types of unemployment unchanged from part (a)?

c. What happens to the natural rate of unemployment and potential GDP if structural unemployment falls to 1.5 percent with other types of unemployment unchanged from part (a)?

Reference no: EM13183182

Questions Cloud

Journalize the entry to record the amount of cash proceeds : Journalize the entry to record the amount of cash proceeds from the sale of the bonds and determine the total interest expense for 2010

Research on the elderly has shown : Research on the elderly has shown that-they grow increasingly fearful of death. they become increasingly prone to car accidents. most eventually develop dementia.

Time and money would need to be spent on training : "Time and money would need to be spent on training and developing the employee to do the job effectively. This information is important for a recruiter to know when staffing".

Contract to develop child care software for NCC : Your company has been awarded a contract to develop Child Care Software for Neñios Day Care Center (NCC). The software should maintain a database of Family, Child, and Payroll information. Users of the software shall have the ability to add/update/de..

What happens to the natural rate of unemployment : If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment? Where is the ec..

Compare the use of open market operations : Compare the use of open market operations, loans to financial institutions, and changes in reserve requirements to control the money supply on the basis of the following criteria: flexibility, reversibility, effectiveness, and speed of implementat..

Find the break points associated with each source : Find the break points associated with each source of capital and use them to specify each of the ranges of total new financing over which the firm's WACC remains constant.

Elements of european imperialism-bad to absolutely evil : There's little question that many of the elements of European imperialism over the centuries have ranged from bad to absolutely evil, but have there been at least some good elements as well?

User Account

All Pages