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The remaining level of unemployment that occurs even when the economy is healthy is called the:
ACyclical rate of unemployment
BMaximum rate of unemployment
CSeasonal rate of unemployment
DNatural rate of unemployment
Answer & Solution
Correct answer: D. Natural rate of unemployment
1. Even a strong economy never reaches zero unemployment.
2. Some unemployment persists in good times as well as bad.
3. Economists have a term for that remaining level.
4. They call it the natural rate of unemployment.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 7 'Unemployment'_
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