Why is full employment considered a major economic goal?

Question

Quizplus · Accepted Answer

Full employment is considered a major economic goal because the opportunity cost of unemployment is lost production. When individuals are unemployed, they are not producing goods or services, resulting in a loss of potential economic output. This leads to a decrease in economic welfare and a decrease in overall living standards. Therefore, achieving full employment is essential to maximize economic output and living standards. Choice A is incorrect because specialization is possible even with unemployment, but the efficiency gains from specialization are limited by unemployment. Choice B is incorrect because growth can occur even with some level of unemployment, although full employment can lead to higher rates of economic growth. Choice D is incorrect because inflation can be affected by other factors besides employment, such as changes in the money supply or aggregate demand.

Why Is Full Employment Considered a Major Economic Goal