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If the natural rate of unemployment in a country is 6 percent and the unemployment rate in the country is 8 percent, the cyclical unemployment in the country must be ________. (in percent)

Question

If the natural rate of unemployment in a country is 6 percent and the unemployment rate in the country is 8 percent, the cyclical unemployment in the country must be ________. (in percent)

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Solution

The cyclical unemployment rate can be calculated by subtracting the natural rate of unemployment from the actual unemployment rate.

Here's how you do it:

  1. Identify the actual unemployment rate. In this case, it's 8 percent.
  2. Identify the natural rate of unemployment. In this case, it's 6 percent.
  3. Subtract the natural rate of unemployment from the actual unemployment rate.

So, 8 percent (actual unemployment rate) - 6 percent (natural rate of unemployment) = 2 percent.

Therefore, the cyclical unemployment in the country is 2 percent.

This problem has been solved

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