Question

The natural rate of employment is achieved when:

a.the actual rate of unemployment is equal to zero.
b.the natural rate of unemployment is equal to the actual rate of unemployment
c.the quantity of labor supplied is equal to the quantity of labor demanded.
d.there is no cyclical unemployment.

Answer 1

The correct answer is letter "D": there is no cyclical unemployment.

Step-by-step explanation:

Natural unemployment is often defined as the lowest unemployment rate that an economy can achieve. It's natural because factors other than a bad economy trigger it. Unemployment that is not considered to be natural is called cyclical, institutional or policy-based unemployment.

Thus, when there is natural unemployment there is no cyclical, institutional or policy-based unemployment.

Answer 2

I would say the answer is that the natural rate of employment is c. when the amount of labour supplied is equal to the amount of labour demanded. In other words the supply and demand for employment are in equilibrium and there is no excess on either side.