Some economists say that "full employment" exists in an economy when:
A)cyclical unemployment is 2 percent.
B)cyclical unemployment is 4 to 6 percent.
C)frictional unemployment is zero.
D)the unemployment rate is 4 to 7 percent.
E)the natural unemployment rate is zero.

Question

Quizplus · Accepted Answer

Full employment exists when the economy is operating at the natural rate of unemployment, which includes both frictional and structural unemployment. This means that some level of unemployment will always be present, but it is not due to cyclical fluctuations in the economy. The commonly accepted range for the natural rate of unemployment is between 4 to 7 percent, making option D the best choice.

Some Economists Say That "Full Employment" Exists in an Economy