Question

Does full employment mean that unemployment reaches zero? Explain your answer with explanation.

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Abdul-Rahim Taysir

Answer 1

Full employement does not mean that there is zero unemployment. For any economy if there is full employment there will be approximately 5% unemployment or in other words we can say that 5% unemployment means there is full employment.

Full employment means all resources are being used at their full capacity, but in between there is someresources which are not employed even when economy is at full employment. For example one person leaves one job and searching for another job, although he is unemployed only for some time. Like this there may be other resources which are in transition from one employment to another employment and in between they are unemployed.

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