Most economists believe that a zero rate of unemployment
A)is obtainable with the correct monetary policy.
B)would result in a better functioning economy.
C)is inconsistent with a well-functioning economy.
D)is obtainable only if the inflation rate is also zero.

Question

Quizplus · Accepted Answer

Most economists believe that a zero rate of unemployment is inconsistent with a well-functioning economy. This is because a certain level of unemployment, known as the natural rate of unemployment, is necessary to maintain price stability and prevent inflation. If everyone is employed, there may be upward pressure on wages and prices, leading to inflation.

Most Economists Believe That a Zero Rate of Unemployment