Question

If the natural rate of unemployment equals 4 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:

Answer 1

Answer:

2%

Explanation:

The natural rate of unemployment is 4%

The actual rate of unemployment is 6%

Therefore, the cyclical unemployment can be calculated as follows

Cyclical unemployment= actual rate of unemployment-natural rate of unemployment

= 6%-4%

= 2%

Hence the cyclical unemployment is 2%