If an economy operates on its production possibilities frontier, the natural unemployment rate must be:
A)zero.
B)positive.
C)negative.
D)at 1 percent.
E)at 5 percent.

Question

Quizplus · Accepted Answer

The natural unemployment rate is the sum of frictional and structural unemployment, which is always positive even when an economy is operating at full capacity on its production possibilities frontier.

If an Economy Operates on Its Production Possibilities Frontier, the Natural