Economics Unemployment Questions
Full employment refers to a situation in an economy where all available labor resources are being utilized efficiently, and the unemployment rate is at its natural or equilibrium level. In other words, it is a state where the number of job vacancies matches the number of individuals seeking employment, resulting in minimal involuntary unemployment. Full employment does not imply zero unemployment, as there will always be some level of frictional and structural unemployment due to factors such as job transitions, skills mismatch, and geographical mobility. However, it signifies a healthy labor market where the economy is operating at its maximum potential, with stable wages and a low level of cyclical unemployment.