Homework SourseWhich of the following more than one could be applicable pro
Which of the following (more than one could be applicable) provides a definition for the natural rate of unemployment?
A combination of frictional and structural unemployment that persists in an efficient, expanding economy when labor and resource markets are in equilibrium.
The rate of unemployment when the labour market is in equilibrium.
A long-run concept that characterises the average unemployment rate over, say, a decade.
The level of unemployment when the labour market is in equilibrium.
| 1. | A combination of frictional and structural unemployment that persists in an efficient, expanding economy when labor and resource markets are in equilibrium. | |
| 2. | The rate of unemployment when the labour market is in equilibrium. | |
| 3. | A long-run concept that characterises the average unemployment rate over, say, a decade. | |
| 4. | The level of unemployment when the labour market is in equilibrium. |
Solution
The natural rate of unemployment is the rate of unemployment when the labour market is in equilibrium. The natural rate of unemployment includes structural and frictional unemployment. Cyclical unemployment is not considered to be part of the natural rate of unemployment.
1) & 2)
