The natural rate of unemployment is the rate of unemployment
A) to which an economy will return after a recession or a boom.
B) which is determined by the country's minimum wage.
C) which could be zero.
D) which cannot be raised by labor market institutions.
E) which is determined by the rate of inflation.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the rate to which an economy will return after a recession or a boom. It is the rate of unemployment that exists when the labor market is in equilibrium and there is no cyclical unemployment. It is also known as the non-accelerating inflation rate of unemployment (NAIRU).

The Natural Rate of Unemployment Is the Rate of Unemployment