The natural rate of unemployment occurs at _____
A) the economy's nominal output.
B) the economy's real output.
C) the economy's potential output.
D) the nominal rate of inflation.
E) the real rate of inflation.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the level of unemployment that is consistent with the economy's potential output. It is the rate of unemployment that exists when the labor market is in equilibrium, and there is no cyclical unemployment. At the natural rate of unemployment, the economy is producing at its potential output level.

The Natural Rate of Unemployment Occurs at _____