a. If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment

4%

Explanation:

The natural rate of unemployment is the sum of the frictional and structural unemployment rate because these represent the unemployment that a country would still experience even if it was at full employment and the actual GDP was equal to its Potential GDP.

Natural unemployment rate = Frictional unemployment + Structural unemployment

= 2% + 2%

= 4%

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