Figure 17-4
-Refer to Figure 17-4. What is the natural rate of unemployment?

Question

Figure 17-4 
-Refer to Figure 17-4. What is the natural rate of unemployment?

Quizplus · Accepted Answer

The natural rate of unemployment is the sum of frictional and structural unemployment, which appear to add up to 5 percent in this figure. Choice A is incorrect because there will always be some unemployment due to people moving between jobs or looking for new jobs, which is frictional or structural unemployment. Choices B and D are incorrect because the figure shows the natural rate of unemployment at 5 percent, not 2 percent or 8 percent.

Figure 17-4 -Refer to Figure 17-4. What Is the Natural Rate of Natural