The economy's self-correcting mechanism always tends to push the unemployment rate back toward a specific rate of unemployment called the

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The natural rate of unemployment refers to the rate of unemployment that exists when the economy is operating at full employment and is not experiencing any cyclical unemployment. It is the rate that is consistent with a stable inflation rate and reflects the structural and frictional factors in the labor market. The economy's self-correcting mechanism tends to push the unemployment rate back toward this natural rate.

The Economy's Self-Correcting Mechanism Always Tends to Push the Unemployment