The idea that,in the long run,the rate of unemployment is NOT related to the rate of inflation is based on the concept of the
A) multiplier.
B) division of labor.
C) law of one price.
D) backward-bending supply curve of labor.
E) natural rate of unemployment.

Question

Quizplus · Accepted Answer

The concept of the "natural rate of unemployment" suggests that there is a certain level of unemployment that will always exist in an economy, regardless of the rate of inflation. This is due to factors such as frictional unemployment (people between jobs), seasonal unemployment, and structural unemployment (mismatches between available jobs and workers' skills). Therefore, in the long run, changes in the rate of inflation should not have a significant impact on the overall rate of unemployment.

The Idea That,in the Long Run,the Rate of Unemployment Is