A Central Concept in Macroeconomics Is the Idea of the Natural

question 76

Essay

A central concept in macroeconomics is the idea of the natural rate of unemployment.Why does it make sense to define full employment to occur when the unemployment rate equals the natural rate of unemployment,instead of when the unemployment rate equals zero? Elaborate and explain carefully.

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Definitions:

Automatic Processing

The unconscious encoding of incidental or well-learned information without effort.

Effortful Processing

The active and conscious effort to encode or store information in memory.

Iconic Memory

A type of visual sensory memory that holds an exact copy of what is seen for a very brief period of time, usually under a second.

Serial Position Effect

A phenomenon in memory research indicating that people tend to remember the first and last items in a series better than the middle items.