Which of the following statements is FALSE?
A)the availability of unemployment benefits reduces the natural rate of unemployment
B)the natural rate of unemployment can be reduced by policies designed to affect the composition of the labor force
C)high rates of unemployment often have a way of perpetuating themselves
D)the unemployment rate among white males 20 years and older is lower than the overall unemployment rate
E)even when the economy is at the full-employment level of output, some frictional unemployment still exists

Question

Quizplus · Accepted Answer

The availability of unemployment benefits may reduce frictional unemployment, but it does not reduce the natural rate of unemployment. The natural rate of unemployment is the minimum level of unemployment that the economy can sustain without experiencing inflationary pressures. It is determined by structural and institutional factors such as demographics, technology, and labor market policies, and cannot be reduced by demand-side policies such as monetary or fiscal stimulus.

Which of the Following Statements Is FALSE