If the economy is at full employment, then the unemployment rate

Question

Quizplus · Accepted Answer

Full employment occurs at the level of employment when the labor market is in equilibrium, where the number of people who want to work (supply) is equal to the number of jobs available (demand). In this situation, the unemployment rate is at the natural rate of unemployment, which is the rate of unemployment that exists when the labor market is in equilibrium and there is no cyclical unemployment. Therefore, the correct answer is B, which is the only option that states that the unemployment rate is equal to the natural rate of unemployment at full employment.

If the Economy Is at Full Employment, Then the Unemployment