Which of the following is correct?
A)In the U.S.the natural rate of unemployment is frequently near 2%.
B)The natural rate of unemployment fluctuates more than the cyclical rate of unemployment.
C)The cyclical rate of unemployment is sometimes below the natural rate of unemployment.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The cyclical rate of unemployment can be below the natural rate of unemployment during periods of economic growth and expansion. Option A is incorrect because the natural rate of unemployment in the U.S. is generally estimated to be around 4-5% rather than 2%. Option B is also incorrect because the natural rate of unemployment is considered to be more stable than the cyclical rate of unemployment, which fluctuates with the business cycle.

Which of the Following Is Correct