Assume that they are not replaced. A OR the event in part B, explain how the change would affect the natural rate of unemployment. Egypt starts to give unemployment benefits to workers for three months after they lose their job. The minimum wage is raised. There were more dust storms here in my second year in Cairo than in my first.
Dust storms cause depreciation of capital.
In a homework question, we talked about hysteresis. That is where a large unemployment rate will raise the natural rate of unemployment and a low unemployment rate will lower the natural rate of unemployment. Explain why this might occur. Go to the other version of this test . Return to the tests page .