When the unemployment rate falls to the full-employment level:
A) There is increased concern about inflation.
B) Many resources are idle.
C) The size of the labor force decreases.
D) There is increased concern about deflation.

Question

Quizplus · Accepted Answer

When the unemployment rate falls to the full-employment level, it means that almost all available resources in the economy are being used, including labor. This can lead to an increase in the cost of labor and a rise in wages, which can cause inflationary pressures. As a result, policymakers become more concerned about controlling inflation.

When the Unemployment Rate Falls to the Full-Employment Level