Which of the following statements about the natural rate of unemployment is the most accurate?
A)It includes only cyclical unemployment.
B)It is the sum of both frictional and structural unemployment.
C)It is the sum of both cyclical and structural unemployment.
D)It includes only frictional unemployment.

Question

Quizplus · Accepted Answer

The natural rate of unemployment refers to the normal level of unemployment in the economy, which includes both frictional (due to individuals searching for new jobs) and structural unemployment (due to long-term changes in the economy such as changes in technology or industry structure). It does not include cyclical unemployment (due to fluctuations in the business cycle). Therefore, choice B is the most accurate statement.

Which of the Following Statements About the Natural Rate of Unemployment