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5. The United States is an open economy with a flexible exchange rate regime. The natural rate of
unemployment is 5%, the frictional rate of unemployment is.4%, and the actual rate of unemployment is
7%. What is the numerical value of the cyclical rate of unemployment in the United States?

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kaeybutt1

Answer:

4.4%

Explanation:

It is not directly observable, but the Congressional Budget Office estimates the U.S. natural unemployment rate is about 4.4%. The unemployment rate is most often used as a measure of labor market strength, but it is also a useful indicator and predictor of the broader state of the economy.

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