0%

Between 0% and 5%

5%

Over 5%

Because in the long run, government policies will ensure that unemployment is at its natural rate.

Because in the long run, the labour market will settle so that unemployment is at its natural rate

Because of the quantity theory of money

Because its true shape is unknown

rise in the expected rate of inflation

A natural disaster which temporarily disrupts production

A rise in the benefits paid to unemployed people.

An increase in the labour force

A change in the expected rate of inflation

A natural disaster which temporarily disrupts production

Improved technology which increases labour demand

A rise in the price of imported inputs

To secure generally stable prices, governments should aim to keep the money stock stable over time

Government efforts to reduce unemployment have lags, so when they take effect, it may be too late

Government efforts to hold unemployment below the natural rate will lead to accelerating inflation if people form adaptive expectations about the inflation rate

If the unemployment rate exceeds the natural rate, wage flexibility will return the rate to the natural rate quite quickly.