The natural rate of unemployment is always more than the actual rate of unemployment because it excludes frictional and seasonal unemployment rates.

Question

Quizplus · Accepted Answer

The natural rate of unemployment includes frictional and seasonal unemployment rates, as they are considered to be normal and expected in a healthy economy. The natural rate of unemployment represents the level of unemployment that exists when the economy is operating at full capacity, with all factors of production employed at their natural levels. The actual rate of unemployment can be either higher or lower than the natural rate, depending on various economic factors.

The Natural Rate of Unemployment Is Always More Than the Actual