The Natural Rate of Unemployment

question 103

Multiple Choice

The natural rate of unemployment:

• A) would increase if a larger percentage of the labor force were over 25 years old.
• B) would increase if union membership fell.
• C) would increase if unemployment benefits were increased.
• D) will always remain fixed.

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Definitions:

Stock Prices

The market price at which shares of a public company's stock are bought and sold.

Fed

Short for the Federal Reserve, which is the central banking system of the United States, responsible for monetary policy.

Interest Rates

The cost of borrowing money or the return on investment, expressed as a percentage of the principal.

Wealth Effect

The change in spending behavior by individuals or households due to a change in their wealth, often as a result of asset price changes.