Full employment is not zero unemployment because
A)there are statistical errors when determining the unemployment rate that cannot be overcome.
B)there is "normal" friction in the economy made up of those workers who are between jobs and those new entrants to the labor force.
C)there are undocumented workers in the economy who are not counted by the Bureau of Labor Statistics.
D)government workers are not counted in the labor force.

Question

Quizplus · Accepted Answer

Full employment refers to the level of employment where all available labor resources are being used in the most efficient way possible. This does not mean zero unemployment because there will always be some level of frictional unemployment - people who are between jobs or new to the labor force. It is considered normal and unavoidable in a dynamic economy with constantly changing labor demands. Therefore, the best choice is B. The other options (A, C, and D) do not accurately describe the reasons for the existence of frictional unemployment.

Full Employment Is Not Zero Unemployment Because