If the economy is operating at the natural rate of unemployment, which of the following is essentially eliminated?
A)frictional unemployment
B)structural unemployment
C)cyclical unemployment
D)all of the above

Question

If the economy is operating at the natural rate of unemployment, which of the following is essentially eliminated?
A)​frictional unemployment
B)​structural unemployment
C)​cyclical unemployment
D)​all of the above

Quizplus · Accepted Answer

When the economy is operating at the natural rate of unemployment, there is no cyclical unemployment, which is caused by fluctuations in the business cycle. However, frictional and structural unemployment may still exist due to other factors such as job search and skills mismatch. Therefore, the correct answer is C) cyclical unemployment.

If the Economy Is Operating at the Natural Rate of Unemployment