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The level of unemployment that exists even when the economy is stable is referred to as natural rate of unemployment. This unemployment results from the combination of economic, social, and political factors that occur when economy is stable and growing strongly. Natural rate of unemployment is determined in long run by economic supplies and production possibilities.

Natural rate of unemployment remains same over period of time because NRU is likely to change when there are drastic change in reforms of public policy.

For example, if an unemployed worker is provided benefits such as unemployment insurance, medical benefits, and food stamps, then the opportunity cost of remaining unemploymed would be lower.

In first case opportunity cost of unemployment is lower and that worker will be less eager to seek a new job. and that worker will be less eager to seek a new job. and on other hand with government providing support worker will be motivated to do the work.