Question

According to the Congressional Budget Office, from the 1970s to the 2000s, the natural rate of unemployment in the United States:

A. increased.
B. remained relatively stable.
C. fell.
D. fell to zero, and has since become negative.

Answer 1

The natural rate of unemployment in the United States, as reported by the Congressional Budget Office, fell from the 1970s to the 2000s, with average rates lower in the 1990s and early 2000s than the 1980s, and forecasts indicating continual declines post the 2008-2009 Great Recession.

Step-by-step explanation:

According to the Congressional Budget Office (CBO), the natural rate of unemployment in the United States from the 1970s to the 2000s fell. This is evidenced by the average natural rate of unemployment being lower in the 1990s and early 2000s compared to the 1980s. Even after the 2008-2009 Great Recession, which saw unemployment rates climb to 10%, the CBO forecasted a drop to about 5% by 2015. Subsequent data supports this decline; as of the start of 2020, unemployment rates were at 3.5%, and a CBO estimate put the natural rate at 4.6% in the first quarter of 2022.

With these points in mind, it is clear that, over the long term, the U.S. unemployment rate has not generally trended up, nor has it remained at basically the same level. Instead, it has trended down from the highs of previous decades.