If both frictional and structural unemployment increased, the natural rate of unemployment:
A)Would increase
B)Would not change
C)Would decrease
D)Would be affected in an unpredictable manner

Question

If both frictional and structural unemployment increased, the natural rate of unemployment:
A)​Would increase
B)​Would not change
C)​Would decrease
D)​Would be affected in an unpredictable manner

Quizplus · Accepted Answer

Both frictional and structural unemployment are considered to be part of the natural rate of unemployment, which represents the level of unemployment that exists when the economy is at its potential output level. When both types of unemployment increase, it means that more people are unemployed due to structural issues in the economy or due to the time it takes to find a job, which would result in an increase in the natural rate of unemployment.

If Both Frictional and Structural Unemployment Increased, the Natural Rate