Deviations of the actual unemployment rate from the natural rate of unemployment are called
A) frictional unemployment.
B) cyclical unemployment.
C) seasonal unemployment.
D) underemployment.

Question

Quizplus · Accepted Answer

Deviations of actual unemployment rate from the natural rate of unemployment refers to the cyclical unemployment, which is the unemployment due to the business cycle fluctuations. The natural rate of unemployment is the sum of structural and frictional unemployment, which are normal and inevitable. Seasonal unemployment refers to the unemployment caused by seasonal fluctuations in the demand for labor, while underemployment refers to the situation where individuals work in jobs that do not fully utilize their skills or abilities.

Deviations of the Actual Unemployment Rate from the Natural Rate