Question

What does "full employment" mean in economics?

Options

• Every person in the country has a job

• All willing workers get jobs at the current wage rate

• There is zero unemployment in the economy

• Only government employees are fully employed

Answer 1

All willing workers get jobs at the current wage rate

Explanation:

Full employment means that all people who are willing to work at the prevailing wage rate are able to find jobs. It does not mean zero unemployment, some frictional and structural unemployment may still exist.