Which of the following statements is (are) true? I. If cyclical unemployment is 0%, then the unemployment rate equals the natural rate of unemployment.
II) The unemployment rate consists of only frictional or structural unemployment.
III) An unemployment rate of zero percent is generally considered the equivalent of full employment.
A) I only
B) II only
C) II and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Cyclical unemployment is the deviation from the natural rate, so if it is 0%, the unemployment rate equals the natural rate, which includes frictional and structural unemployment. Full employment does not mean 0% unemployment, as frictional and structural unemployment still exist.

Which of the Following Statements Is (Are) True? I