The Natural Rate of Unemployment

question 141

Multiple Choice

The natural rate of unemployment

• A) is a temporary low rate that cannot be maintained.
• B) is fixed; it cannot be altered by public policy.
• C) is equal to the number of persons unemployed divided by the number in the labor force.
• D) is the unemployment rate accompanying the economy's maximum sustainable rate of output.

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Definitions:

Time Preference

The economic principle that people prefer to receive goods or services sooner rather than later, reflecting the relative valuation placed on immediate versus future consumption.

Loanable Funds

The money available for borrowing in the financial markets, derived from savings and supplied to borrowers at an interest.

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry, ensuring market integrity, and protecting investors.

Investor Losses

The decrease in monetary value that investors experience in their investment portfolio due to market movements or poor investment decisions.