Which statement 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 unemployment 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

I is true. If there is no cyclical unemployment, then the unemployment rate equals the natural rate of unemployment, which includes only frictional and structural unemployment. III is also true. An unemployment rate of 0% is generally considered full employment. However, II is false. The unemployment rate includes all types of unemployment, including frictional, structural, and cyclical.

Which Statement Is/are True? I