The natural rate of unemployment is the rate that results when:
A) cyclical unemployment is eliminated.
B) frictional unemployment is eliminated.
C) structural unemployment is eliminated.
D) involuntary unemployment is eliminated.

Question

Quizplus · Accepted Answer

The natural rate of unemployment occurs when the economy is at full employment, which means cyclical unemployment (associated with economic downturns) is eliminated. Frictional and structural unemployment can still exist at the natural rate of unemployment.

The Natural Rate of Unemployment Is the Rate That Results