The natural rate of unemployment is generally thought to be the sum of ?
Correct answer: C. frictional unemployment and structural unemployment
- A. frictional unemployment and seasonal unemployment
- B. frictional unemployment and cyclical unemployment
- C. frictional unemployment and structural unemployment
- D. cyclical unemployment and structural unemployment
Explanation
The natural rate includes unemployment that remains even when the economy is operating normally: frictional unemployment from job search and structural unemployment from skill or industry mismatches. Cyclical unemployment is excluded because it results from recessions.
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