An economy is producing its Natural Real GDP when the unemployment rate is equal to the __________ unemployment rate.
A) frictional
B) structural
C) sum of the frictional unemployment rate and the structural
D) seasonal
E) cyclical

Question

Quizplus · Accepted Answer

The Natural Real GDP is achieved when the economy is at its full employment level, which excludes cyclical unemployment but includes both frictional and structural unemployment. Therefore, the correct answer is the sum of the frictional unemployment rate and the structural unemployment rate.

An Economy Is Producing Its Natural Real GDP When the Unemployment