The natural unemployment rate includes
A)both frictional and structural unemployment.
B)neither frictional nor structural unemployment.
C)structural but not frictional unemployment.
D)frictional but not structural unemployment.

Question

Quizplus · Accepted Answer

The natural unemployment rate refers to the long-term equilibrium rate of unemployment in an economy. It includes both frictional and structural unemployment, which are considered to be unavoidable and inherent to a healthy and dynamic labor market. Frictional unemployment is caused by workers transitioning between jobs or entering the labor force, while structural unemployment is caused by a mismatch between the skills and qualifications of workers and the demands of employers. Therefore, option A is the correct choice.

The Natural Unemployment Rate Includes