The natural rate of unemployment is the same as the socially optimal rate of unemployment.

Question

Quizplus · Accepted Answer

The natural rate of unemployment refers to the level of unemployment consistent with a stable rate of inflation, and it includes frictional and structural unemployment but not cyclical unemployment. The socially optimal rate of unemployment might differ, as it would consider additional factors such as the social and economic costs of unemployment, aiming for a balance that maximizes societal welfare rather than just stabilizing inflation.

The Natural Rate of Unemployment Is the Same as the Socially