Suppose the unemployment rate is 8.5% and we know that frictional and structural unemployment together account for 5.5%.The cyclical unemployment rate is then
A)14%.
B)8.5%.
C)5.5%.
D)3.0%.
E)-3.0%.

Question

Quizplus · Accepted Answer

The cyclical unemployment rate can be found by subtracting the sum of frictional and structural unemployment from the overall unemployment rate. 
Cyclical unemployment rate = Unemployment rate - (Frictional unemployment + Structural unemployment) 
Cyclical unemployment rate = 8.5% - 5.5% 
Cyclical unemployment rate = 3.0% 
Therefore, the answer is D) 3.0%.

Suppose the Unemployment Rate Is 8