If the economy is operating at full employment, then
A)everyone who wants a job has one.
B)the unemployment rate is approximately 3 percent.
C)the entire labour force is employed.
D)the unemployment rate is zero.
E)the unemployment rate is equal to the frictional unemployment rate plus the structural unemployment rate.

Question

Quizplus · Accepted Answer

At full employment, the unemployment rate is not zero but includes frictional and structural unemployment, which are natural and unavoidable in a healthy economy.

If the Economy Is Operating at Full Employment, Then