Suppose the Economy Is Experiencing Frictional Unemployment of 1 Per

question 65

Multiple Choice

Suppose the economy is experiencing frictional unemployment of 1 per cent, structural unemployment of 3 per cent and cyclical unemployment of 4 per cent. What is the natural unemployment rate?

• A)7 per cent
• B)3 per cent
• C)5 per cent
• D)4 per cent

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Definitions:

World Price

The price at which goods trade on the international market, reflecting the global balance of supply and demand for those goods.

Import

Goods or services that come into a country from abroad for sale.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a product and the actual price they do pay.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual amount they receive, due to market prices being higher.