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Fact 21.2.3
Oregon's 5.6 percent unemployment rate hovers close the national average of 5.5 percent. A few years ago, Oregon had one of the highest unemployment rates in the nation. To avoid rising unemployment, Oregon Governor Kulongoski introduced a plan that provides public schools and universities with enough state funds to meet growing demand for skilled workers. Also Kulongoski wants to use state and federal money for bridges, roads, and buildings to stimulate more construction jobs.
Source: The Oregonian, July 8, 2008
-Consider Fact 21.2.3. If these policies are successful, we would expect to see Oregon's natural unemployment rate to
A)fall to zero percent.
B)fall.
C)not change.
D)rise.
E)be equal to the sum of cyclical, structural, and frictional unemployment rates.

Question

Quizplus · Accepted Answer

If the policies are successful, we would expect to see Oregon's unemployment rate to fall, but it is unlikely to fall to zero percent. The natural unemployment rate is not equal to the sum of cyclical, structural, and frictional unemployment rates, and it is not expected to remain unchanged. Therefore, the best answer is B.

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