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natural rate of unemployment (J6)<br />1 The single rate of unemployment compatible with a constant rate of inflation.<br /> 2 The long-term rate of unemployment around which an economy fluctuates as EXPECTATIONS of wage and price changes are fully realized by the associated rate of inflation. Attempts to move the economy to a lower rate of unemployment by fiscal and monetary stimulation are unsuccessful as expectations increase leading to inflationary increases in prices and wages which push the unemployment rate back to the natural rate. The natural rate changes in response to changes in the composition of the labour force as flows in and out of the stock of the unemployed are affected. The natural rate is usually illustrated by a vertical PHILLIPS CURVE.<br /><em>Reference</em><br />Friedman, M. (1968) 'The role of monetary policy', American Economic Review 58 (March): 1 17.
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<strong>SAP</strong> – Satisfactory Academic Progress. To remain eligible for most types of financial aid, the student must maintain satisfactory academic progress as defined by the school.
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