--%>

Definition of Full Employment

Definition of “Full Employment”?

E

Expert

Verified

1. Full employment does not mean zero unemployment.

2. The full employment unemployment rate is equal to the total frictional and structural unemployment.

3. The full employment rate of unemployment is also referred to as the natural rate of unemployment.

4. The natural rate is achieved when labor markets are in balance; the number of job seekers equals the number of job vacancies.  At this point the economy’s potential output is being achieved.

5. The natural rate of unemployment is not fixed but depends on the demographic makeup of the labor force and the laws and customs of the nations.

6. The recent drop in the natural rate of 6% to 5.5% has occurred mainly because of the aging of the work force and increased competition in product and labor markets.

   Related Questions in Business Economics

  • Q : Explanation of theory of pricing for

    The theory of pricing for particular goods explained in Adam Smith’s Wealth of Nations is most consistent along with: (1) mercantilist doctrine. (2) Richard Cantillon’s distinction between “value in

  • Q : Market efficiency while transaction

    Transaction costs tend to be decreased and markets are more efficient when: (w) the government subsidizes a good. (x) inter-market price differentials are eliminated through arbitrage. (y) taxes are used to give for social wants. (z) regulations close

  • Q : Public policies for low-income Fuel

    Fuel stamp programs which subsidize heating oil purchases through low-income households encourage those families to: (w) create more income by working. (x) particularly conserve on their use of fuel. (y) live along with less purchasing power. (z) subs

  • Q : Describe World Trade Organization

    Describe World Trade Organization (WTO)?

  • Q : Freely Floating Currency Question: For

    Question: For a freely floating currency, currency i.____________________ occurs when the market value of a country's currency rises relative to the value of another country's currency, while currency ii.__________

  • Q : Forcast 9. The following table shows

    9. The following table shows annual sales data for Stuff Happens, Inc., over the ten-year 1998-2008 period: Year Sales ($ Millions) 1998 $2.0 1999 2.2 2000 2.4 2001 2.6 2002 2.8 2003 3.0 2004 3.2 2005 3.5 2006 3.8 2007 4.1 2008 4.3 A. Calculate the 1998-2008 growth rate in sales using

  • Q : Define cyclical fluctuations Define

    Define cyclical fluctuations?

  • Q : Super committee failure Question: Some

    Question: Some commentators have argued that the failure of the "Super committee" is good thing for the economy?  Do you agree? Answer: The Super committe

  • Q : Elucidate Reliance on technology and

    Elucidate Reliance on technology and capital goods of the market system?

  • Q : What are the criteria of issuing stocks

    What are the criteria of issuing stocks or bonds?