Which statement is characteristic of the natural rate of unemployment?
A) It is a consistent rate, year after year.
B) It is the desirable rate of unemployment.
C) It is a variable that cannot be altered by economic policy.
D) It is the amount of unemployment that the economy normally experiences.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the amount of unemployment that the economy normally experiences, even in the absence of cyclical fluctuations. It represents the sum of frictional and structural unemployment. It is not necessarily a consistent rate year after year, nor is it desirable as it is still unemployment. However, it is generally believed to be a variable that cannot be easily altered by economic policy.

Which Statement Is Characteristic of the Natural Rate of Unemployment