We say that the economy is at full employment if the unemployment rate is equal to

Question

Quizplus · Accepted Answer

The natural rate of unemployment refers to the rate of unemployment that exists when the labour market is in equilibrium and there is no cyclical unemployment. In other words, all persons who are willing and able to work at the going wage rate have jobs. Therefore, when the unemployment rate equals the natural rate of unemployment, the economy is considered to be at full employment.

We Say That the Economy Is at Full Employment If