The natural rate of unemployment is:
A) composed of frictional, structural, and cyclical unemployment.
B) equal to zero.
C) always greater than the actual unemployment rate.
D) composed of structural and frictional unemployment.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is composed of structural and frictional unemployment. It represents the lowest possible unemployment rate that still allows for the normal functioning of the labor market. It is not equal to zero, and is typically greater than the actual unemployment rate, which includes cyclical unemployment.

The Natural Rate of Unemployment Is