The difference between the existing unemployment rate and the natural unemployment rate is defined is the __________ unemployment rate.
A) frictional
B) structural
C) cyclical
D) natural

Question

Quizplus · Accepted Answer

The difference between the existing unemployment rate and the natural unemployment rate is called cyclical unemployment, as it is caused by the natural fluctuations of the business cycle. Frictional unemployment refers to temporary unemployment due to the time it takes to match a worker with a new job, while structural unemployment is caused by a mismatch between the skills of job seekers and the needs of employers. The natural unemployment rate is the sum of frictional and structural unemployment.

The Difference Between the Existing Unemployment Rate and the Natural