In the long run, unemployment
I. will be at the natural rate of unemployment.
II. is made up of structural and frictional unemployment.
III. could be made up of structural, frictional, and cyclical unemployment.

Question

Quizplus · Accepted Answer

Unemployment in the long run will eventually reach the natural rate of unemployment, which is the rate of unemployment that exists when there is no cyclical unemployment. This natural rate of unemployment is made up of structural and frictional unemployment. However, in the short run, there can be cyclical unemployment caused by economic downturns. Therefore, unemployment in the long run could be made up of structural, frictional, and cyclical unemployment.

In the Long Run, Unemployment