Question

Because the natural rate of unemployment is not known precisely, policymakers who use it as a guide for the policy must be

a. less aggressive with policy changes than they would be if they knew the value of the natural rate.
b. more aggressive with policy changes than they would be if they knew the value of the natural rate.
c. ready to change policy more quickly.
d. aware of other data.

Answer 1

d. aware of other data.

Step-by-step explanation:

The natural rate of unemployment is a rate that the economy tends to assume over time. This rate is not accurate, because the economy is something very fixed that can totally change the factors of employability and expectations of employees in several different sectors of the market.

As this rate is not natural and very imprecise, it is necessary for policy makers to be aware of other economic data that can help them to formulate employability and job management policies.

Answer 2

Answer: C. ready to change policy more quickly.

Step-by-step explanation:

Natural rate of unemployment this is usually affected by the supply-side factors which are geographical or occupational immobilities and the imperfections displayed by the labour market. A very important factor which affects structural unemployment is the geographical and occupational mobility of labour. As such policy makers who use the natural rate of employment must be ready to change policy more quickly due to uncertainties it posses.