The natural rate of unemployment has increased in the United States and Europe over the last twenty years. What are things that could account for this?
What will be an ideal response?
The natural rate of unemployment is affected by various rigidities. These rigidities include unions, government-imposed licenses, and other restrictions in labor markets, minimum wage laws, and welfare, and unemployment insurance. If these rigidities have become more important, then the labor markets are likely to suffer from greater structural unemployment and the natural rate of unemployment would be greater.
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The natural rate of unemployment will help determine
A) the open economy effect. B) the position of the long-run aggregate supply curve. C) the level of economic growth in the economy. D) low levels of inflation.
In high-inflation countries, workers prefer to spend their income faster compared to low-inflation countries
a. True b. False Indicate whether the statement is true or false