Actual unemployment can exceed the natural rate of unemployment due to
A) structural unemployment.
B) cyclical unemployment.
C) frictional unemployment.
D) all of the above

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the rate of unemployment that exists when there is no cyclical unemployment. Cyclical unemployment occurs due to fluctuations in the business cycle and can cause actual unemployment to exceed the natural rate. Structural and frictional unemployment are part of the natural rate and do not cause actual unemployment to exceed it. Therefore, option B is the correct choice.

Actual Unemployment Can Exceed the Natural Rate of Unemployment Due