Is it possible for the economy to be at full employment and still have some people who are unemployed?
A) No,full employment means that no one is unemployed.
B) Yes,since full employment exists if the economy is operating at the natural unemployment rate and there is always some natural unemployment.
C) Yes,since full employment exists if the economy is operating at the frictional unemployment rate and there is always some frictional unemployment.
D) Yes,since full employment equals the sum of the cyclical unemployment rate and the natural unemployment rate,and there is always some cyclical unemployment.
E) none of the above

Question

Quizplus · Accepted Answer

Full employment refers to an economy in which all available labor resources are being used efficiently. This does not necessarily mean that every single person in the labor force has a job, but rather that the unemployment rate is at its natural rate. The natural rate of unemployment includes some level of frictional and structural unemployment that is always present in the economy, even at full employment. Hence, Option B is the correct answer.

Is It Possible for the Economy to Be at Full