A zero percent unemployment rate
A)is one of the economic goals of the Canadian government.
B)would alleviate scarcity.
C)is not consistent with the notion of full employment.
D)was last achieved during World War II when everyone was willing to work at the going wage rate to end the war.
E)is the only efficient unemployment rate.

Question

Quizplus · Accepted Answer

While zero percent unemployment may seem desirable, it is not consistent with the notion of full employment. Full employment occurs when there is a natural rate of unemployment due to factors such as skills mismatch, frictional unemployment, and seasonal factors. It is also generally considered to be around 4-5%. Zero percent unemployment would indicate a labor shortage, which would lead to inflationary pressures and potential wage increases that could harm the economy.

A Zero Percent Unemployment Rate