Question

19 mark for review
which of the following best describes an economy at full employment?
a the rate of unemployment is zero.
b there is only structural and cyclical unemployment.
c there is only cyclical unemployment.
d there is cyclical, but not structural, unemployment.
e there is frictional, but not cyclical, unemployment.

Explanation:

Full employment means the economy has no cyclical unemployment (unemployment from economic downturns). However, frictional unemployment (workers transitioning jobs) and structural unemployment (mismatch of skills/jobs) still exist. Option E correctly states only frictional, no cyclical unemployment.

Answer:

E. There is frictional, but not cyclical, unemployment.