B it is possible for an economy to operate for a time

  • University of Delaware
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b) It is possible for an economy to operate for a time with an unemployment rate less that the "natural" unemployment rate. (Also known as NAIRU, the non-accelerating inflation rate of unemployment).
2) a) What is the difference between structural, frictional and cyclical unemployment? How are these three types of unemployment related to the concept of full employment?
b) Why is it difficult to know which measured rate of unemployment corresponds to “full employment,” and why is there currently uncertainty about the level of NAIRU?

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