The natural rate of unemployment:
A) occurs when the unemployment rate is zero and everyone who is willing to work has a job.
B) fluctuates with the business cycle.
C) is associated with the economy's maximum sustainable output rate.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the level of unemployment consistent with an economy operating at its maximum sustainable output, accounting for frictional and structural unemployment, but not cyclical unemployment.

The Natural Rate of Unemployment