Maximum Employment

Maximum employment is an economic term that refers to the highest level of employment that can be achieved in an economy without causing inflation. It is a goal of many governments and central banks, as it is believed to lead to greater economic stability and prosperity. Maximum employment is usually achieved through a combination of fiscal and monetary policies, such as tax cuts, government spending, and interest rate adjustments.

History of Maximum Employment

The concept of maximum employment has been around since the early 20th century, when economist John Maynard Keynes first proposed it as a way to reduce unemployment and stimulate economic growth. Since then, it has become a cornerstone of macroeconomic theory, and is used by governments and central banks around the world to guide their economic policies.

In the United States, the Federal Reserve has a dual mandate of achieving maximum employment and stable prices. This mandate was established in 1977, when Congress passed the Full Employment and Balanced Growth Act. The act requires the Federal Reserve to use its monetary policy tools to promote maximum employment and price stability.

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Summary

Maximum employment is an economic term that refers to the highest level of employment that can be achieved in an economy without causing inflation. It is a goal of many governments and central banks, as it is believed to lead to greater economic stability and prosperity. Maximum employment is usually achieved through a combination of fiscal and monetary policies, such as tax cuts, government spending, and interest rate adjustments. For more information on maximum employment, visit the websites of the Federal Reserve, the International Monetary Fund, and the World Bank.

See Also

• Full Employment
• Monetary Policy
• Fiscal Policy
• Inflation
• Unemployment
• Gross Domestic Product
• Economic Growth
• Interest Rates
• Balance of Payments
• Exchange Rates

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