Full employment implies the level of employment in which there is absence of cyclical or demand-deficient unemployment. Furthermore, full employment is defined as the adequate level of unemployment above zero rate of unemployment; the deviation from zero rate of unemployment is explained by the existence of non-cyclical types of unemployment. Indeed, presently full employment is defined as the Non-Accelerating Inflation Rate of Unemployment arising from economists’ argument that an unemployment rate of above 0% is critical to control the rate of inflation. Zero rate of unemployment is considered detrimental because workers would demand pay rise fuelling inflation. Since 1949 ...
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