When Macroeconomics Refers to "Full Employment," What Do They Mean

question 13

Multiple Choice

When macroeconomics refers to "full employment," what do they mean?

• A) Full employment occurs when the unemployment rate equals zero.
• B) Full employment occurs when there is only frictional unemployment, and all other types of unemployment have been eliminated.
• C) Full employment occurs when there is only structural unemployment, and all other types of unemployment have been eliminated.
• D) Full employment occurs when there is only frictional unemployment, structural, and cyclical unemployment has been eliminated.

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Definitions:

Negative Production Externality

An economic situation where the production process results in a harmful effect on third parties or the environment, which is not reflected in the cost of production.

Positive Production Externality

A situation where the production of a good or service results in beneficial effects for other people or entities that were not involved in the transaction.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be consumed by anyone without reducing its availability to others.

Marginal Revenue

The additional revenue generated from selling one more unit of a good or service.