Although monetary policy cannot reduce the natural rate of unemployment, other types of policies can.

Question

Quizplus · Accepted Answer

Monetary policy primarily focuses on controlling inflation and stabilizing the economy. It is not directly aimed at reducing the natural rate of unemployment, which is determined by structural and demographic factors. However, other types of policies such as education and training programs, labor market reforms, and investment in infrastructure can potentially reduce the natural rate of unemployment.

Although Monetary Policy Cannot Reduce the Natural Rate of Unemployment