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Question
Assertion (A): Full employment is the situation when all those workers who are able to work and willing to work get employment at the prevailing wage rate.
Reason (R): The situation of full employment is achieved when aggregate demand equals aggregate supply.
Options
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation for Assertion (A).
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation for Assertion (A).
Assertion (A) is true but Reason (R) is false.
Both Assertion (A) but Reason (R) are false.
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Solution
Assertion (A) is true but Reason (R) is false.
Explanation:
Assertion (A) is true, as it accurately defines full employment as a state where all willing and able workers find jobs at prevailing wages. Reason (R) is false because the condition AD = AS merely establishes macroeconomic equilibrium, which can frequently occur at an underemployment level.
