When macroeconomists refers to "full employment," what do they mean?
A) Full employment occurs when the unemployment rate equals zero.
B) Full employment occurs when there is only cyclical unemployment, and all other types of unemployment have been eliminated.
C) Full employment occurs when there is only structural unemployment, and all other types of unemployment have been eliminated.
D) Full employment occurs when there is only frictional unemployment; structural and cyclical unemployment has been eliminated.

Question

Quizplus · Accepted Answer

Full employment occurs when there is only frictional unemployment; structural and cyclical unemployment have been eliminated. This is because frictional unemployment is the result of individuals moving between jobs and taking time to search for suitable employment, whereas structural and cyclical unemployment are caused by factors such as changes in technology or downturns in the economy. Therefore, achieving full employment by eliminating frictional unemployment is considered optimal as it allows for the natural movement of workers between jobs while minimizing unnecessary unemployment. However, it is generally acknowledged that achieving complete elimination of all forms of unemployment is not realistic or desirable.

When Macroeconomists Refers to "Full Employment," What Do They Mean