The items listed below relate to either the natural rate of unemployment or cycl

Question

The items listed below relate to either the natural rate of unemployment or cyclical unemployment. Sort them correctly and be sure to place ALL items. Natural Rate of Unemployment Cyclical Unemployment High-income countries focus on reducing this type of unemployment Can increase due to reduced geographic mobility Low-income countries focus on reducing Associated with a recession this type of unemployment Can decrease through expansionary fiscal policy Can decrease through less restrictive labor laws Can increase through contractionary monetary policy Exists when the economy is producing at its potential

Explanation / Answer

Natural rate of unemployment is the level of unemployment existing even in a healthy economy because workers are always leaving and joining new jobs seeking for job growth, better opportunities, etc. Their joblessness until finding a new job is the natural rate of unemployment. It may occur due to reasons like structural, frictional or surplus unemployment.

Cyclical Unemployment refers to the unemployment rate in an economy which varies with the peaks and lows of economic trends or the production in an economy. It is undesired type of unemplyment and counteries always like to reduce this employment. Following will come under this list:-

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