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

Question

Quizplus · Accepted Answer

Actual unemployment can fall below the natural rate of unemployment due to negative cyclical unemployment, which occurs when the economy is operating above its potential level, resulting in increased employment opportunities and lower unemployment rates. However, structural and frictional unemployment are part of the natural rate of unemployment and are not factors that contribute to actual unemployment falling below the natural rate.

Actual Unemployment Can Fall Below the Natural Rate of Unemployment