The long-run rate of unemployment to which an economy always gravitates is the
A)normal rate of unemployment.
B)natural rate of unemployment.
C)neutral rate of unemployment.
D)inflationary rate of unemployment.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the long-run rate of unemployment to which an economy always gravitates. It is the sum of frictional and structural unemployment, meaning it represents the unemployment rate that would exist in a perfectly functioning labor market.

The Long-Run Rate of Unemployment to Which an Economy Always