Question

The natural rate of unemployment is A. the sum of structural unemployment and cyclical unemployment. B. the sum of cyclical unemployment and frictional unemployment. C. the sum of seasonal unemployment and cyclical unemployment. D. the sum of structural unemployment and frictional unemployment. When the economy is at full​ employment, unemployment is equal to A. normal rate of unemployment minus abnormal rate of unemployment. B. cyclical unemployment minus seasonal unemployment. C. zero. D. the natural rate of unemployment.

Answer 1

Answer: 1.(D), 2.(D)

Explanation:

Natural rate of unemployment is referred to as the ratio, the state of full employment, in proportion with workforce that are still unemployed. Natural unemployment rate is evaluated by an economy's supply side, therefore economic institutions and production possibilities. Natural rate of unemployment is also referred as the combination of structural and frictional unemployment that tends to reside in an efficient and booming economy where resource and labor market is mostly in equilibrium.