The concept of 'Natural Rate of Unemployment' is associated with which school of thought?
A. Keynesian economics
B. Classical economics only
C. Marxian economics
D. Monetarist economics
Answer: Option D
Solution (By JKSSB Mock Tests)
Milton Friedman and Edmund Phelps developed the concept of the natural rate of unemployment, which is the unemployment rate consistent with stable inflation in the long run.
Explanation:
Automatic stabilisers such as progressive income taxes and unemployment benefits automatically moderate economic fluctuations without requiring new policy decisions.
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