The NAIRU:
A) is difficult to measure.
B) can change over time.
C) occurs at the economy's level of potential output.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

All three statements are true. The NAIRU (Non-Accelerating Inflation Rate of Unemployment) is difficult to measure because it is not directly observable and must be estimated. It can change over time due to shifts in economic conditions or changes in government policies. The NAIRU represents the rate of unemployment at which inflation is stable and occurs at the economy's level of potential output, meaning that the economy is operating at its maximum sustainable level without experiencing undue inflationary pressures.