Final answer:
The statement that a large increase in the price of oil increases the natural rate of unemployment is false, as natural unemployment is not typically influenced by price volatility but by longer-term factors.
Step-by-step explanation:
The statement that a large increase in the price of oil increases the natural rate of unemployment is generally considered false. The natural rate of unemployment refers to the unemployment rate that arises from all sources except fluctuations in aggregate demand. It is associated with long-term factors such as structural and frictional unemployment, which may not be directly influenced by volatile prices such as those of oil.
However, a large increase in the price of oil can lead to cost-push inflation and may cause cyclical unemployment if businesses reduce production due to higher costs. It can also cause adjustments in the labor market as sectors relying on oil may demand fewer workers. These shifts, however, do not necessarily affect the natural rate of unemployment which remains consistent with the normal functioning of an economy over the long run.