Suppose that the Canadian natural rate of unemployment is 6% when the country experiences a recession and cyclical unemployment increases by 3%. What would be the impact on the natural unemployment rate and what can the government do to reduce unemployment in this case?

Select one:

the natural rate of unemployment would increase to 9%.The government can use expansionary fiscal policy to increase aggregate demand.

the natural rate of unemployment would increase to 9%.The government can use expansionary fiscal policy to increase aggregate demand.

the natural rate of unemployment would decrease to 3%.The government can use expansionary fiscal policy to increase aggregate demand.

the natural rate of unemployment would not change. The government can use expansionary fiscal policy to increase aggregate demand.