Question

The​ full-employment level of employment​ is: A. the equilibrium level of employment reached after all wages and prices have fully adjusted. B. the level of employment when aggregate demand is equal to​ short-run aggregate supply. C. the level of employment where there is no structural or frictional unemployment.

Answer 1

Option A.

• The full employment level of employment is the equilibrium level of employment reached after all wages and prices have fully adjusted.
• An economy is said to have full employment when all the resources in the Economy are being used up in an efficient manner and maximum people are employed.
• It is a level of employment where the employment has reached an equilibrium level and more people are participating in the labour force because the wages and prices are Fully adjusted.