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Question
The natural rate of unemployment is defined as the rate of unemployment that
A) prevails in long-run macroeconomic equilibrium, when all workers and employers have fully adjusted to any changes in the economy.
B) prevails in the short-run macroeconomic equilibrium, before workers and employers have had a chance to adjust to an economic shock.
C) exists due to welfare and unemployment benefits that reduce potential workersʹ incentives to find work.
D) exists only during periods of recession or depression in the economy.
Answer
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