The natural rate of unemployment is defined as the unemployment rate that exists in the absence of:
A) structural unemployment.
B) frictional unemployment.
C) cyclical unemployment.
D) seasonal unemployment.
E) inflation.

Question

Quizplus · Accepted Answer

The natural rate of unemployment only includes frictional and structural unemployment, but not cyclical unemployment. Therefore, the absence of cyclical unemployment is necessary for calculating the natural rate of unemployment.

The Natural Rate of Unemployment Is Defined as the Unemployment