If the unemployment rate is 5 percent (full employment),our economy is operating
A)inside the production curve.
B)on the production curve.
C)outside the production curve.

Question

Quizplus · Accepted Answer

Full employment, or the natural rate of unemployment, occurs when there is no cyclical unemployment and the economy is producing at its maximum potential output. This means that the economy is operating on the production curve, where all available resources are being utilized efficiently. Therefore, the best choice is B.

If the Unemployment Rate Is 5 Percent (Full Employment),our Economy