The natural rate of unemployment equals
A) structural plus frictional plus cyclical unemployment.
B) structural plus frictional unemployment.
C) the rate of unemployment we observe in any given period of measurement.
D) the rate of structural unemployment.
Question 2
The economy suffered a mild recession in 2001. Despite the recession, home sales and durable goods sales remained high. Which of the following is a plausible explanation?
A) The Fed's pursuit of contractionary policy stimulated these markets.
B) The Fed caused a reduction in the federal funds rate to its lowest level in 40 years.
C) Home building and consumer durable purchases are always high during a recession.
D) Rising inflation encouraged many to invest in the real estate market.
