The full-employment rate of unemployment is also called the:
A) Potential rate of unemployment
B) Cyclical rate of unemployment
C) Frictional rate of unemployment
D) Natural rate of unemployment

Question

Quizplus · Accepted Answer

The full-employment rate of unemployment is also known as the natural rate of unemployment, which is the rate of unemployment that prevails when the economy is producing at its potential output level and there is no cyclical unemployment. It consists of structural and frictional unemployment and is not affected by short-term fluctuations in economic activity.

The Full-Employment Rate of Unemployment Is Also Called The