Question

If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals:

Answer 1

1%

Step-by-step explanation:

The computation of cyclical unemployment is shown below:

Cyclical unemployment is

= Actual rate of unemployment - the natural rate of unemployment

= 6% - 5%

= 1%

We simply deduct the natural rate of unemployment from the Actual rate of unemployment so that the cyclical unemployment could come and hence the difference is called as a cyclical unemployment, the same is to be considered