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Consider two hypothetical countries. In Country A, 27% of the labour force is unemployed for four months a year. In Country B, 12% of the

Consider two hypothetical countries. In Country A, 27% of the labour force is unemployed for four months a year. In Country B, 12% of the labour force is unemployed for nine months a year. Note that both countries have an overall unemployment rate of 9%.

Which of these countries seem to have a more serious unemployment problem and explain why. Also how can it be related to NAIRU?

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