If unemployment is at the natural rate, then there
A) will be only cyclical unemployment.
B) is no frictional unemployment.
C) is no cyclical unemployment.
D) will be cyclical and frictional unemployment but not structural unemployment.

Question

Quizplus · Accepted Answer

When unemployment is at the natural rate, the economy is operating at full employment, meaning there is no cyclical unemployment. However, there may still be some frictional unemployment as workers transition between jobs, but this is not related to the overall state of the economy. Structural unemployment, which is caused by a mismatch between the skills of workers and the needs of employers, can still exist even when unemployment is at the natural rate.

If Unemployment Is at the Natural Rate, Then There