Currently, economists estimate that the natural rate of unemployment in the United States is about
A) 10 percent.
B) 2 percent.
C) 5 percent.
D) 0 percent.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the level of unemployment that exists in an economy when there is no cyclical unemployment, which is caused by fluctuations in economic activity. Economists estimate that this natural rate of unemployment in the United States is around 5 percent, which means that any level of unemployment below 5 percent could be considered as representing a tight labor market, while any level above 5 percent could be seen as reflecting a slack labor market. Therefore, choice C is the best option among the given alternatives.

Currently, Economists Estimate That the Natural Rate of Unemployment in the United