Statistics Barbacoa has completed an extensive study of unemployment in the Barbacoan labour market. The study reveals the Barbacoan labour market typically has frictional unemployment of 2% and structural unemployment of 4%. Additionally, Statistics Barbacoa has estimated the Barbacoan economy is currently growing at 5% annually. This is above the long-run average (a.k.a. 'potential output') growth rate of 3% for the Barbacoan economy. Use the above information to answer the questions below.
a) What is Barbacoa's natural rate of unemployment (NRU)?
B) Is Barbacoa's actual unemployment rate currently above or below the NRU? Why? Hint: use Okun's Law to calculate the actual rate of unemployment.