The natural unemployment rate
A) is a constant figure of about 4 percent.
B) fluctuates with the rate of inflation.
C) is the unemployment rate that occurs when the economy is at full employment.
D) is equal to cyclical unemployment.

Question

Quizplus · Accepted Answer

The natural unemployment rate is the level of unemployment when the economy is at full employment, meaning it includes frictional and structural unemployment but not cyclical unemployment. It is not a constant figure, does not directly fluctuate with inflation, and is distinct from cyclical unemployment.

The Natural Unemployment Rate