Answered: When the economy is at its full…

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Economics

When the economy is at its full employment level, is the unemployment rate zero? Justify your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

When the economy is at its full employment level, is the unemployment rate zero? Justify your answer.

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

Expert Solution

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No. When the economy is at its full employment level, it does not mean that unemployment rate in the economy is zero.

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