When an economy is at full employment, the unemployment rate is zero percent.

Question

Quizplus · Accepted Answer

Full employment means that all people who are willing and able to work have jobs. However, there may still be some level of frictional unemployment, where individuals are between jobs or looking for better opportunities, and structural unemployment where there are mismatches between the skills of workers and the available job openings. Therefore, the unemployment rate cannot technically be zero percent, even in a full employment economy.

When an Economy Is at Full Employment, the Unemployment Rate