The Federal Reserve monetary policy goals of maximum employment means

Question

Quizplus · Accepted Answer

The Federal Reserve's goal of maximum employment means keeping the unemployment rate close to the natural unemployment rate, which is the level of unemployment that occurs when the economy is operating at full capacity. It is not possible or desirable to have a zero percent unemployment rate as some level of frictional and structural unemployment is natural in any economy. Additionally, the Federal Reserve recognizes that some level of cyclical unemployment may be unavoidable during economic downturns and may not necessarily need to be minimized at all times.

The Federal Reserve Monetary Policy Goals of Maximum Employment Means