If unemployment is at the natural rate, then there
A) is no cyclical unemployment.
B) is no frictional unemployment.
C) will be cyclical and frictional unemployment but not structural unemployment.
D) will be only cyclical unemployment.

Question

Quizplus · Accepted Answer

When unemployment is at the natural rate, it means the economy is at full employment, and any remaining unemployment is structural or frictional, not cyclical. Cyclical unemployment occurs during downturns in the business cycle, which is not present when the economy is at its natural rate of unemployment.

If Unemployment Is at the Natural Rate, Then There