According to new classical economists, the long-run economy will operate:
A) with no unemployment.
B) with cyclical unemployment.
C) at the natural rate of unemployment.
D) with a high level of unemployment because of weak government regulation.

Question

Quizplus · Accepted Answer

New classical economists believe that in the long run, the economy will operate at the natural rate of unemployment, which includes frictional and structural unemployment but not cyclical unemployment. This view holds that the economy self-adjusts to achieve full employment, where all unemployment is voluntary or due to the natural turnover in the labor market.

According to New Classical Economists, the Long-Run Economy Will Operate