Distinguish Between Equilibrium and Disequilibrium Unemployment

Distinguish between equilibrium and disequilibrium unemployment.

LRAS curve represents natural rate of output the economy produces when unemployment is at natural rate of potential output = equilibrium.

Shift in AS is caused by its determinants: 1. input prices 2. productivity 3. legal institutional environment

This shift can cause disequilibrium of unemployment  A-equilibrium  B-increase in unemployment  C-decrease in unemployment A shift in AD can cause disequilibrium of unemployment. Determinants that can cause AD to shift: 1. Consumption 2. Investment 3. Government spending 4. Net Exports Change in unemployment  A-equilibrium  B-decrease in unemployment  C-increase in unemployment