The natural rate of unemployment
A) is a specific unemployment rate that can be a target for the Fed
B) changes as the inflation rate changes
C) is natural because it does not change from period to period
D) is a measure of the quality of the Fed's performance
E) changes as the efficiency of job searches change

Question

Quizplus · Accepted Answer

The natural rate of unemployment changes as the efficiency of job searches change because it reflects the long-term rate of unemployment determined by the labor market's structural characteristics, including how effectively workers find jobs.

The Natural Rate of Unemployment