The natural rate of unemployment
A)is constant over time.
B)varies over time,but can't be changed by the government.
C)is the unemployment rate that the economy tends to move to in the long run.
D)depends on the rate at which the Fed increases the money supply.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the unemployment rate that the economy tends to move towards in the long run. This rate is determined by structural and institutional factors such as demographics, technology, and labor market regulations. While it may vary over time, it cannot be changed by government policy. The Fed's actions in increasing the money supply may affect aggregate demand and shift the actual unemployment rate away from the natural rate in the short run, but it does not change the natural rate itself.

The Natural Rate of Unemployment