Question

The natural rate of unemployment is
a. the sum of seasonal unemployment and cyclical unemployment.
b. the sum of structural unemployment and cyclical unemployment.
c. the sum of structural unemployment and frictional unemployment. d. the sum of cyclical unemployment and frictional unemployment.

Answer 1

Answer:

The correct answer is option c.

Explanation:

The natural rate of unemployment is the unemployment rate that exists in a heathy economy. When the unemployment rate is equal to natural rate, the economy is considered to be at full employment.

It includes only structural and frictional unemployment, cyclical unemployment is not included.