Natural rate of unemployment

• Natural rate of unemployment is when the labour market is in equilibrium
• What is natural rate of unemployment?

  Natural rate of unemployment is when the labour market is in equilibrium
• The natural rate of unemployment consists of structural, frictional and seasonal unemployment
• What does the natural rate of unemployment consist of?

  structural, frictional and seasonal unemployment
• Natural rate of unemployment diagram:

  A) sactual

  B) sl

  C) DL

  D) wage

  E) Quantity of workers

  
• What does the s actual curve mean in the NRU diagram?

  willingness to work
• Natural rate of unemployment diagram:

  A) W1

  B) nru

  C) qfe

  D) q2

  
• What does QFE mean in the NRU diagram?

  Number of workers in work
• What is the difference between Qfe and Q2 in NRU diagram?

  Q2 workers are willing and able to work but only qfe workers are actually taking jobs
• What are the free market determinants of the NRU:

  • Generous benefits system, encouraging structural employment
• What are the Interventionist determinants of the NRU:

  • Lack of transport/Housing infrastructure causing geographical immobility
  • Lack of training causing occupational immobility
• What does a lack of transport infrastructure cause?

  geographical immobility
• What does a lack of training cause?

  occupational immobility