The natural rate of unemployment is generally thought of as the ?
Correct answer: D. sum of frictional unemployment and structural unemployment.
- A. ratio of the frictional unemployment rate to the cyclical unemployment rate.
- B. Sum of structural unemployment and cyclical unemployment.
- C. Sum of frictional unemployment and cyclical unemployment
- D. sum of frictional unemployment and structural unemployment.
Explanation
The natural rate of unemployment consists of frictional unemployment, caused by job search, and structural unemployment, caused by mismatches of skills or locations. Cyclical unemployment is excluded because it results from deficient aggregate demand.
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