1. What determines the natural rate of unemployment?

  2. Describe the difference between frictional unemployment and wait unemployment.

  3. Give three explanations why the real wage may remain above the level that equilibrates labour supply and labour demand.

  4. Is most unemployment long-term or short-term? Explain your answer.

  5. How do economists explain the high natural rate of unemployment in the 1970s and 1980s? How do they explain the fall in the natural rate in the 1990s and early 2000s?