The natural unemployment rate
A) is equal to cyclical unemployment.
B) fluctuates with the rate of inflation.
C) is the unemployment rate that occurs when the economy is at full employment.
D) is a constant figure of about 4 percent.

Question

Quizplus · Accepted Answer

The natural unemployment rate is the rate that occurs when the economy is at full employment with only frictional and structural unemployment present. This rate fluctuates over time and is not a constant figure. It is different from cyclical unemployment, which is caused by fluctuations in the business cycle. It is also not directly related to inflation.

The Natural Unemployment Rate