Asked by Salli Braswell on Jun 27, 2024
Verified
When we are at full employment
A) the unemployment rate is 0.
B) the cyclical unemployment rate is 0.
C) the structural unemployment rate is 0.
D) the frictional unemployment rate is 0.
Full Employment
A situation in an economy where all available labor resources are being used in the most economically efficient way, typically characterized by low unemployment.
Cyclical Unemployment
Unemployment attributed to the cyclical trends in the economy, typically increasing during recessions and decreasing during expansions.
- Distinguish between various categories of unemployment and their distinct features.
Verified Answer
KR
Kayla RodriguezJun 27, 2024
Final Answer :
B
Explanation :
Full employment means that the economy is producing at its maximum potential output level, and all factors of production are being utilized. This means that there is still some level of frictional and structural unemployment, which are caused by factors such as workers transitioning between jobs or changes in the structure of the economy. However, cyclical unemployment, which is caused by a decrease in aggregate demand or a recession, is minimized at full employment. Therefore, the cyclical unemployment rate is closest to 0 at full employment, while frictional and structural unemployment may still exist to some extent.
Learning Objectives
- Distinguish between various categories of unemployment and their distinct features.