Estimates for the ________ rate of unemployment that routinely occurs in the United States range from 4 to 6 percent.
A) frictional
B) structural
C) natural
D) cyclical

Question

Quizplus · Accepted Answer

The term "natural rate of unemployment" refers to the level of unemployment that exists when the labor market is in equilibrium and there is no cyclical unemployment. It is also sometimes called the "full employment" rate. Estimates for the natural rate of unemployment in the United States typically range from 4-6%, making choice C the correct answer. Frictional unemployment and structural unemployment are both types of unemployment that can exist even when the labor market is in equilibrium, but they are not related to the natural rate. Cyclical unemployment is caused by fluctuations in the business cycle, so it is not a natural or equilibrium rate of unemployment.

Estimates for the ________ Rate of Unemployment That Routinely Occurs