Which statement is INCORRECT?
A) The natural rate of unemployment is generally considered the equivalent of full employment.
B) The natural rate of unemployment consists of only frictional unemployment or structural unemployment.
C) The natural rate of unemployment is the level at which inflationary pressures in the economy are at their maximum.
D) The natural rate of unemployment is when cyclical unemployment is zero.

Question

Quizplus · Accepted Answer

The natural rate of unemployment refers to the rate of unemployment that exists in a healthy economy with no cyclical unemployment. It consists of both frictional and structural unemployment. The natural rate of unemployment does not necessarily correspond to the maximum level of inflationary pressure in the economy.

Which Statement Is INCORRECT