Can the natural rate of unemployment be avoided?
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What is the natural rate of unemployment, and what types of unemployment constitute the natural rate of unemployment?
If actual GDP is less than potential GDP, then:
A) The actual unemployment rate exceeds the natural unemployment rate.
B) The GDP gap will be negative.
C) The actual unemployment rate is less than the natural unemployment rate.
D) There will be no cyclical unemployment present.
"The natural rate of unemployment is equal to frictional unemployment plus structural unemployment". Explain the statement using the relationship between the natural rate of unemployment and frictional, cyclical and structural unemployment.