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Which of the following would increase the natural rate of unemployment? |

Which of the following would increase the natural rate of unemployment?

unemployment
j asked:


Although fluctuations in the unemployment rate are an ever-changing phenomenon, the natural rate of unemployment fluctuates much less than the actual unemployment rate. In fact, factors that affect the actual unemployment rate might not affect the natural rate.

Which of the following would increase the natural rate of unemployment?

I. Teenagers can enter the labor force at an earlier age.
II. The economy has been in an expansion for the last decade.
III. The government raises the minimum wage for manual laborers.
IV. Labor unions have become more demanding in terms of negotiating higher wages.

A. II only

B. All of these

C. I, III, and IV only

D. II, III, and IV only

E. III and IV only

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2 Responses to “Which of the following would increase the natural rate of unemployment?”

  1. E. Factors that change the long-term price of labor will change the natural rate of unemployment.

    December 12th, 2008 | 2:06 pm
  2. E…the rest would decrease the unemplyment rate. Only III and IV will increase the unemployment rate.

    December 14th, 2008 | 3:54 am

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