The relationship between the unemployment rate and the natural unemployment rate is that the unemployment rate
A) fluctuates about the natural rate.
B) is always below the natural rate.
C) is always above the natural rate.
D) equals the natural rate.

Question

Quizplus · Accepted Answer

The natural unemployment rate is sometimes referred to as the "full employment" rate or the rate at which there is no cyclical unemployment. The unemployment rate typically fluctuates above and below the natural rate due to various economic factors such as changes in demand, technology, and government policies. Therefore, the best choice is A, as it accurately represents the relationship between the two rates.

The Relationship Between the Unemployment Rate and the Natural Unemployment