Define the natural rate of unemployment (also known as full employment unemployment or NAIRU-Non...

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Define the natural rate of unemployment (also known as full employment unemployment or NAIRU-Non Accelerating inflation rate of unemployment).What is the difference between the unemployment rate and the natural rate of unemployment (NAIRU)?What is the currentnatural rateof unemployment? How did it change in the past 30 years? What kinds of factors affect the natural rate of unemployment?Considering that the current unemployment rate is 4.6% (October 2021), what kind of policies should the government and the Fed implement? (You can use the Keynesian or the Classical-Supply side approach) How do you compare your recommendation to the current government's policies?

Komalavalli · Accepted Answer

1. Natural rate of unemployment is the minimum number that can be sustained in the absence of inflation. Employees come and depart in a functioning economy in quest of greater opportunities. This is the normal joblessness until they find another job. An economy can only achieve zero percent unemployment if it is overheated. Nonetheless, salaries are expected to grow before the jobless rate falls to zero.
2. NAIRU is a specific joblessness rate that is evident in an economy that does not cause inflation. That is, if the unemployment rate is at the NAIRU level,

Define the natural rate of unemployment (also known as full employment unemployment or NAIRU-Non Accelerating inflation rate of unemployment). What is the difference between the unemployment rate and...

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