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The natural rate of unemployment is the unemployed rate when the economy is fully employed with...

The natural rate of unemployment is the unemployed rate when the economy is fully employed with AS = AD; and the Long- run supply curve is vertical at this point of equilibrium; or, the rates arrived at by adding up frictional and structural). If the AS=AD occurs to the left of the vertical supply curve, the unemployment is normal ( includes all three types = cyclical, frictional, and structural).

  1. True
  2. False
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Ans:False  

(cyclical is not a the component, and shift is generally to right) q

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