The Concept of Full Employment

question 118

Multiple Choice

The concept of full employment

• A)is based on the premise that an economy with an efficient labor market will experience no unemployment.
• B)reflects the "shopping" of employees looking for employment and of employers seeking to hire workers.
• C)indicates that full employment is present when the actual rate of unemployment is below the natural rate.
• D)reflects the impact of an economic contraction.

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Definitions:

Bond

A fixed-income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest and the return of the principal at maturity.

Treasury Bill

Short-term, highly liquid government debt obligation issued at a discount from the face value and returning the face amount at maturity.

Par Value

The nominal value of a security stated by the issuer.

Effective Annual Yield

This refers to the real return on an investment, taking into account the effects of compounding interest over a year.