(Old Version) Macro 2.3- Unemployment and Natural Rate of Unemployment- AP Macro

Mr. Clifford from ACDC Econ explains the three types of unemployment: frictional, structural, and cyclical. Frictional unemployment occurs when individuals are between jobs, such as recent graduates. Structural unemployment happens when skills become obsolete, like VCR repairmen. Cyclical unemployment is due to economic downturns. The natural rate of unemployment includes frictional and structural types, typically around 5%, which is considered full employment. If unemployment exceeds this, it indicates cyclical unemployment and economic issues.

Describe cyclical unemployment and its relation to the business cycle.

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What is the natural rate of unemployment and how is it related to full employment?

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