At potential real GDP:
A)there is zero unemployment.
B)there is no seasonal unemployment.
C)there is no frictional unemployment.
D)unemployment is at its natural rate.
E)cyclical unemployment equals approximately 5 percent.

Question

Quizplus · Accepted Answer

At potential real GDP, unemployment is at its natural rate, which is the minimum level of unemployment that can exist in an economy due to factors such as frictional and structural unemployment. This means that there may still be some unemployment (including frictional unemployment), but it is not due to cyclical factors such as a recession or seasonal factors.

At Potential Real GDP