Foundations of Economics, 8th Edition

24.2 The Natural Unemployment Rate

MyEconLab Concept Video

So far, we’ve focused on the forces that determine the real wage rate, the quantity of labor employed, and real GDP at full employment. We’re now going to bring unemployment into the picture.

You learned in Chapter 22 that the BLS measures the amount of unemployment by counting the number of people who do not have a job, are willing to work, and have looked for work in the past 4 weeks. And you learned how we classify unemployment as frictional, structural, or cyclical. Finally, you learned that when the economy is at full employment, all the unemployment is frictional or structural and the unemployment rate is called the natural unemployment rate.

Measuring, describing, and classifying ...