If frictional unemployment is 2%, structural unemployment is 3%, and cyclical unemployment is 4%, the natural rate of unemployment is:
A) 2%.
B) 5%.
C) 7%.
D) 9%.

Name: If frictional unemployment is 2%, structural unemployment is 3%, and cyclical unemployment is 4%, the natural rate of unemployment is: A) 2%. B) 5%. C) 7%. D) 9%.
Brand: Quizplus
Rating: 4.8 (35 reviews)

Question

Quizplus · Accepted Answer

The natural rate of unemployment includes only frictional and structural unemployment, so it is 2% + 3% = 5%. Cyclical unemployment is not included in the natural rate.

If Frictional Unemployment Is 2%, Structural Unemployment Is 3%, and Cyclical