When the labor market is at full employment
A)there is only cyclical unemployment in the economy.
B)there is only structural unemployment in the economy.
C)the unemployment rate is 0%.
D)there is no cyclical unemployment in the economy.

Question

Quizplus · Accepted Answer

At full employment, which is when nearly everyone who wants a job has one, there is still likely to be some level of structural and frictional unemployment (which make up the natural rate of unemployment). However, there is no cyclical unemployment because the economy is operating at its potential output and there are no resources (including labor) left unutilized.

When the Labor Market Is at Full Employment