The gap between the current unemployment rate and the natural rate of unemployment is called
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) full employment.

Question

Quizplus · Accepted Answer

The gap between the current unemployment rate and the natural rate of unemployment is referred to as cyclical unemployment. This type of unemployment is a result of economic downturns or recessions, where there is a decrease in aggregate demand for goods and services leading to a decrease in demand for labor. The other options - frictional unemployment and structural unemployment - refer to different types of long-term unemployment, while full employment simply means the economy is operating at its maximum sustainable level of employment.

The Gap Between the Current Unemployment Rate and the Natural