Which of the following contributes to the natural rate of unemployment?

Question

Quizplus · Accepted Answer

All of the above contribute to the natural rate of unemployment. Unions can create wage rigidities that make it harder for firms to adjust wages in response to market conditions. Efficiency wages are intentionally set above the market equilibrium wage rate in order to attract and retain high-quality workers, but this can also create unemployment in the short run. Job search is a necessary part of the process by which workers are matched with jobs, but it also leads to frictional unemployment. Together, these factors contribute to the natural rate of unemployment, which is the minimum level of unemployment that can be sustained in the economy.

Which of the Following Contributes to the Natural Rate of Unemployment