The Natural Rate of Unemployment Is

question 232

Multiple Choice

The natural rate of unemployment is

• A) zero.
• B) the unemployment rate when there is no structural unemployment.
• C) the unemployment rate becomes negative.
• D) the unemployment rate that exists in long-run equilibrium, after adjustments to all changes have occurred.

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Definitions:

Disposable Income

The pot of funds households have at their disposal for saving and spending, post-income tax.

MPC

refers to the Marginal Propensity to Consume, which is the fraction of additional income that a household spends on consumption.

Disposable Income

The cash flow available to households for the purposes of spending and saving after income taxes.

Disposable Income

Disposable Income is the amount of money that households have available for spending and saving after income taxes have been accounted for, directly influencing consumption and savings behavior.