Question

The structural unemployment rate is 1.3 percent, the frictional unemployment rate is 2.1 percent, and the current unemployment rate is 4.9 percent. The economy is in

Answer 1

If Unemployment rate > natural rate of unemployment, then a recessionary gap exist.
Natural unemployment = Frictional unemployment + Structural unemployment = 1.3+2.1 = 3.4
4.9 > 3.4
So, if the structural unemployment rate is 1.3 percent, the frictional unemployment rate is 2.1 percent, and the current unemployment rate is
4.9 percent. The economy is in a recessionary gap producing less than Natural Real GDP