When cyclical unemployment is zero
A) frictional unemployment is zero.
B) cyclical and frictional unemployment are zero.
C) structural unemployment is zero.
D) the unemployment rate equals the natural unemployment rate.

Question

Quizplus · Accepted Answer

When cyclical unemployment is zero, it means the economy is at its natural rate of unemployment, which includes both frictional and structural unemployment but not cyclical. Cyclical unemployment relates to the business cycle, so when it's zero, the economy is neither in a boom nor a bust, aligning the current unemployment rate with the natural rate.

When Cyclical Unemployment Is Zero