An economy's natural rate of unemployment is the

A) lowest rate of unemployment the economy can achieve.
B) rate associated with the highest possible level of GDP.
C) unemployment created by wages set above the equilibrium level.
D) amount of unemployment that does not go away on its own.

Question

Amarpal Singh · Accepted Answer

Final Answer : D, Explanation :  The natural rate of unemployment is the level of unemployment that persists in an economy in the long run, even when the economy is at full employment. It includes frictional and structural unemployment and does not go away on its own.

An economy's natural rate of unemployment is the

A) lowest rate of unemployment the economy can achieve.
B) rate associated with the highest possible level of GDP.
C) unemployment created by wages set above the equilibrium level.
D) amount of unemployment that does not go away on its own.

Definitions

Learning Objectives

Learning Objectives

Related questions

An economy's natural rate of unemployment is theA) lowest rate of unemployment the economy can achieve.B) rate associated with the highest possible level of GDP.C) unemployment created by wages set above the equilibrium level.D) amount of unemployment that does not go away on its own.

Definitions

Learning Objectives

Learning Objectives

Related questions

An economy's natural rate of unemployment is the

A) lowest rate of unemployment the economy can achieve.
B) rate associated with the highest possible level of GDP.
C) unemployment created by wages set above the equilibrium level.
D) amount of unemployment that does not go away on its own.