Which of the Following Choices Best Explains Why Full Employment

question 79

Multiple Choice

Which of the following choices best explains why full employment is an important goal of monetary policy?

• A)For a nation to reach its economic potential, individuals must be given an opportunity to become productive (employed) members of society.
• B)For a nation to maintain price stability, full employment must be attained first.
• C)Full employment ensures that a nation's external balance will be satisfactory.
• D)Full employment is a condition for politicians to be elected.

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Definitions:

Substitutes

Goods or services that can replace each other in use or consumption, such that an increase in the price of one leads to an increase in demand for the other.

Marginal Revenue

Marginal revenue is the additional revenue that a firm gains from selling one more unit of a good or service.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Price

The cost in money to purchase a particular good or service.