The natural unemployment rate
A) is attained whenever the unemployment rate is less than 5 percent because 95 percent employment is considered full employment.
B) has been estimated to range between 4 percent and 6 percent in the United States in recent years.
C) estimated to be close to 9 percent in recent years in the United States.
D) occurs when 100 percent of the labor force is employed.

Question

Quizplus · Accepted Answer

The natural unemployment rate is the unemployment rate that exists when the economy is at full employment, which means there is no cyclical unemployment. It is estimated to range between 4 percent and 6 percent in the United States in recent years. Therefore, option B is the correct answer. Option A and D are incorrect because they give incorrect definitions of the natural unemployment rate. Option C is incorrect because it gives an unrealistically high estimate of the natural unemployment rate in recent years.

The Natural Unemployment Rate