The natural rate of unemployment includes the:
A) frictionally and cyclically unemployed.
B) cyclically and structurally unemployed.
C) frictionally and structurally unemployed.
D) frictionally, cyclically, and structurally unemployed.

Question

Quizplus · Accepted Answer

The natural rate of unemployment includes the frictionally and structurally unemployed, as these types of unemployment are considered to be normal in a healthy economy. Frictional unemployment occurs when people are between jobs or entering the workforce, while structural unemployment happens when there is a mismatch between the skills of the workforce and the needs of the employers. Cyclical unemployment, caused by downturns in the business cycle, is not included in the natural rate of unemployment.

The Natural Rate of Unemployment Includes The