Question

Full employment is the rate of employment that results when

a) all labor resources of an economy are employed.

b) there is efficient use of the labor force, with allowance made for normal unemployment due to dynamic changes and the structural conditions of the economy.

c) cyclical unemployment is between 4 and 5 percent of the labor force.

d) everybody who wants a job can find one.

Answer 1

Cyclical unemployment is a kind of unemployment which varies over the business cycle such as expansion and recession and in this regard you have to understand that during full employment cyclical unemployment is actually zero and that is the reason why

(C) is wrong

full employment is not when all the labour force is employed for all the people who want to find a job can be employed because even at full employment there are some people who are unemployed and full employment doesn't mean 0% unemployment

Therefore (A,D) are wrong

You have to understand that full employment occurs when all the resources in the economy are put into the most efficient use so that the economy is in maximum capacity utilisation so that maximum possible output can be produced on the whole and this means it employed maximum people according to its capacity and that's why

(B) is the answer to this question