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Which of the following is included in the natural rate of unemployment? A. Frictional unemployment only....

Which of the following is included in the natural rate of unemployment?

A. Frictional unemployment only.
B. Frictional and structural unemployment.
C. Frictional, structural and cyclical unemployment.
D. It can be eliminated

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Answer #1

If we talk about natural rate of unemployment then in simple terms it is the sum of frictional  unemployment and structural unemployment

Frictional unemployment arises when people move from the old Job to new job or try to find a new job

the structural unemployment arises due to the technological advancement

Frictional unemployment arises due to business cycles up and down but natural rate of unemployment is at full employment level and at full employment level cyclical unemployment is zero

so the correct answer here is option B

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