Question

A nation's frictional unemployment rate is 1 per cent. Its cyclical rate of unemployment is 3 per cent, and its structural unemployment rate is 4 per cent. What is this nation's overall rate of unemployment?

Short answer

nation's overall rate of unemployment is$5\%$

Step-by-step solution

introduction

The unemployment rate is the number of jobless individuals isolated by the complete number of individuals in the general workforce.

explanation

The nation's overall rate of unemployment is = frictional$+$structural unemployment as the natural rate of unemployment includes only frictional and structural unemployment.

$$\begin{gathered} \Rightarrow 1+4 \\ =5\% \end{gathered}$$