The lowest level of unemployment compatible with price stability
A)Is referred to as full employment.
B)Is estimated at between 0 and 2 percent unemployment.
C)Allows for some cyclical unemployment.
D)Is equal to the natural rate of unemployment plus the inflation rate.

Question

Quizplus · Accepted Answer

The lowest level of unemployment compatible with price stability is referred to as full employment. This concept acknowledges that there is always some level of frictional or structural unemployment in the economy, but it does not necessarily equate to zero unemployment.

The Lowest Level of Unemployment Compatible with Price Stability