Suppose the Natural Unemployment Rate Is 5 Percent

Multiple Choice

Suppose the natural unemployment rate is 5 percent.Which of the following observations is consistent with an economy that is self-regulating?

A) The unemployment rate in the economy is always above 5 percent.
B) The unemployment rate in the economy is always below 5 percent.
C) There is a tendency for the unemployment rate in the economy to move toward 5 percent if it is not already there.
D) If the unemployment rate in the economy is greater than 5 percent,wages start to rise.
E) If the unemployment rate in the economy is less than 5 percent,wages start to fall.