Question

what determine the natural rate of unemployment

Answer 1

The natural rate of unemployment is, therefore, caused by supply side factors. Thus even when the macro economy is at full output or a “full employment” there can still be unemployment; this unemploymentis the natural rate. Therefore, the natural rate is not determined by a deficiency of AD.

Answer 2

 Milton Freidman argued the natural rate of unemployment would be determined by institutional factors such as: Availability of job information. A factor in determining frictional unemployment and how quickly the unemployed find a job.