The natural rate of unemployment is defined as the rate of ...

[Shelles]

The natural rate of unemployment is defined as the rate of unemployment that
 
  A) exists only during periods of recession or depression in the economy.
  B) exists due to welfare and unemployment benefits that reduce potential workers' incentives to find work.
  C) prevails in long-run macroeconomic equilibrium, when all workers and employers have fully adjusted to any changes in the economy.
  D) prevails in the short-run macroeconomic equilibrium, before workers and employers have had a chance to adjust to an economic shock.

Question 2

What are the three categories of correlation? Illustrate with real life examples.
 
  What will be an ideal response?

[JaynaD87]

Answer to Question 1

C

Answer to Question 2

Correlation can be divided into three categories. These are:
a) Positive correlation that implies that two variables tend to move in the same direction. For example, when income increases, consumption increases.
b) Negative correlation that implies that two variables tend to move in the opposite direction. For example, when people have more professional training they are less likely to be unemployed.
c) Zero correlation which implies that there is no relationship between two variables. For example, the amount of air pollution in India is likely to have no relationship with the pollution control measures adopted in the U.S.

[Shelles]

Gracias!

[gcook]

Excellent