Figure 16-4
-Refer to the Figure 16-4.What is the natural rate of unemployment?
A) 0 percent
B) 2 percent
C) 5 percent
D) 8 percent

Question

Figure 16-4 
-Refer to the Figure 16-4.What is the natural rate of unemployment?
A) 0 percent 
B) 2 percent 
C) 5 percent 
D) 8 percent

Quizplus · Accepted Answer

The natural rate of unemployment is the rate of unemployment when there is no cyclical unemployment, meaning the economy is at full employment. In the figure, the natural rate of unemployment is the point where the long-run aggregate supply curve intersects with the aggregate demand curve, which is at an unemployment rate of about 5 percent. Therefore, the best choice is C.

Figure 16-4 -Refer to the Figure 16-4.What Is the Natural Rate of Natural