The unemployment rate in the US is currently under 4%, which is close to historically low for the US
economy. What does this suggest about
cyclical
unemployment in the US currently?
Using the reasoning described in “The ‘Natural Rate’ of Unemployment,” (RWM 4.2) explain why might
it be unwise for the US government to try to push the unemployment rate lower than 4%? Why might
businesses not want the government to try to further decrease the unemployment rate? Use the term
“reserve army of unemployed” in your answer.
