FINISH the natural rate of unemployment

Question 1

what does NRU stand for?

Answer 1

NRU stands for the natural rate of unemployment

Question 2

what is the natural rate of unemployment?

Answer 2

the natural rate of unemployment is the rate of unemployment when the labour market is in equilibrium

http://www.economicsonline.co.uk/Managing_the_economy/Unemployment_types_and_causes.html

Question 3

what unemployment does the natural rate of unemployment include?

Answer 3

the natural rate of unemployment includes frictional and structural unemployment

Question 4

what is frictional unemployment?

Answer 4

frictional unemployment is the unemployment experienced by workers leaving one job and starting another

Question 5

what is structural unemployment?

Answer 5

structural unemployment is usually caused by the decline of a major industry, which is made worse by labour immobility

Question 6

what are the two types of labour immobility?

Answer 6

the two types of labour immobility are occupational and geographical immobility

Question 7

what causes the natural rate of unemployment?

Answer 7

the natural rate of unemployment is caused by supply-side factors

Question 8

what factors determine the natural rate of unemployment?

Answer 8

factors which lead to the natural rate of unemployment include:

• the level of benefits
• skills and education
• the degree of labour immobility
• the flexibility of the labour market
• hysterisis

Question 9

how does the level of benefits affect the NRU?

Answer 9

a high level of benefits would discourage people from working
a low level of benefits would encourage people to work

Question 10

how do skills and education affect the NRU?

Answer 10

skills and education affects the NRU because

Question 11

how does the degree of labour immobility affect the NRU?

Answer 11

the degree of labour immobility affects the NRU because

Question 12

how does the flexibility of the labour market affect the NRU?

Answer 12

https://www.economicshelp.org/blog/24414/labour-markets/mobility-of-labour/

Question 13

how does hysterisis affect the NRU?

Answer 13

recession

Question 14

why can the NRU be seen as corresponding to full employment?

Answer 14

the NRU can be seen as corresponding to full employment because it is not possible for every person in the workforce to have a job

Question 15

why is it not possible for all people in the workforce to have a job?

Answer 15

it is not possible for all people in the workforce to have a job because no matter how much aggregate demand is increased, there will always be frictional and structural unemployment

Question 16

what are the different types of unemployment?

Answer 16

the different types of unemployment are:

• classical unemployment
• cyclical unemployment
• frictional unemployment
• structural unemployment

Question 17

what is cyclical unemployment also known as?

Answer 17

cyclical unemployment is also known as demand-deficient unemployment