Full employment occurs when the
A) structural unemployment rate equals the frictional unemployment rate.
B) natural unemployment rate equals the frictional unemployment rate.
C) cyclical unemployment rate equals the natural unemployment rate.
D) unemployment rate equals the natural unemployment rate.

Question

Quizplus · Accepted Answer

Full employment occurs when the unemployment rate equals the natural unemployment rate, which includes only frictional and structural unemployment. This means there is no cyclical unemployment, which is due to a lack of aggregate demand in the economy.

Full Employment Occurs When the