The goal for high employment should be a level of unemployment at which the demand for labor equals the supply of labor.Economists call this level of unemployment the
A) frictional rate of unemployment.
B) structural rate of unemployment.
C) natural rate of unemployment.
D) ideal rate of unemployment.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the level of unemployment at which the demand for labor equals the supply of labor, which means that the labor market is in equilibrium. It is also known as the full employment rate of unemployment, and it represents the lowest possible level of unemployment that can be achieved without causing inflation to rise. The other options (frictional rate of unemployment, structural rate of unemployment, and ideal rate of unemployment) do not accurately describe the level of unemployment necessary for a balanced labor market.

The Goal for High Employment Should Be a Level of Unemployment