The unemployment rate when the economy is producing output equal to its potential is known as

Question

Quizplus · Accepted Answer

The answer is C because the term "natural rate of unemployment" refers to the level of unemployment that exists when the economy is producing at its potential output. It is considered a "natural" or normal level of unemployment because it is the result of structural factors such as changes in technology and demographics, rather than cyclical factors such as recessions or booms.

The Unemployment Rate When the Economy Is Producing Output Equal