The natural rate of unemployment 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 rate of unemployment includes both frictional and structural unemployment. Frictional unemployment occurs when workers are between jobs or are looking for their first jobs, while structural unemployment happens when there are mismatches between the skills workers have and the skills needed for available jobs. Both are considered part of the natural rate of unemployment because they are not caused by economic downturns.

The Natural Rate of Unemployment Includes