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Frictional unemployment occurs when workers are temporarily between jobs and is a healthy part of a dynamic economy.
Cyclical unemployment is always higher during periods of economic growth due to increased labor demand.
The natural rate of unemployment includes both frictional and structural unemployment, reflecting a healthy economy.
An increase in the cyclical unemployment rate often indicates a recession where actual unemployment exceeds the natural rate.
Reducing frictional unemployment is the primary goal of monetary policy.
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Unemployment Rates and Economic Indicators
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