What is natural rate of unemployment?
The natural rate of unemployment is the rate that holds over the long-run in equilibrium. In Classical economics, this rate is 0%. With other assumptions, such as frictional and structural unemployment, you will get a natural unemployment rate above 0%. Source: http://www.transtutors.com/homework-help/macro-economics/unemployment/full-employment/
Natural Rate of Unemployment -The natural rate of unemployment is unemployment that does not go away on its own even in the long run. -It is the amount of unemployment that the economy normally experiences.Cyclical Unemployment -Cyclical unemployment refers to the year-to-year fluctuations in unemployment around its natural rate. -It is associated with with short-term ups and downs of the business cycle.
Do monetarists argue that the Natural rate of unemployment can be reduced by macroeconomic policies designed to stimulating aggregated demand?
The Official Unemployment rate (U-3) in US for August 2011 was 9.1. Below are the other unemployment rates in US for August 2011 : U-1 Unemployment rate : 5.4 U-2 Unemployment rate : 5.3 U-3 Unemployment rate : 9.1 U-4 Unemployment rate : 9.7 U-5 Unemployment rate : 10.6 U-6 Unemployment rate : 16.2
What does a contractionary gap imply about the actual rate of unemployment relative to the natural rate of unemployment?
What is the relationship of frictional structural and cyclical unemployment to full-employment rate of unemployment or natural rate of unemloyment?
Economists recognize three major types of unemployment: frictional - the unemployment experienced between changing jobs or in the midst of training between jobs. It is also called search unemployment. structural - the unemployment due to the mismatch between the skills of the unemployed workers and the vacancies available (i.e., if one lacks the skills to get the job or if one doesn't want the job and chooses to stay unemployed because one is overqualified). cyclical…