Categories of UnemploymentThe problem of unemployment is usually divided into two categories. The long-run problem and the short-run problem: The natural rate of unemployment The cyclical rate of unemployment
Natural Rate of UnemploymentThe natural rate of unemploymentisunemployment that does not go away on its own even in the long run. It is the amount of unemployment that the economy normally experiences. (moving) average of unemployment rate
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Cyclical UnemploymentCyclical unemploymentrefers to the year-to-year fluctuations in unemployment around its natural rate. current unemployment –natural rate of unemployment It is associated with with short-term ups and downs of the business cycle.