📚 Learning Guide
Full Employment Equilibrium
easy

What type of unemployment is primarily addressed by achieving full employment equilibrium in an economy?

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Learning Path

Question & Answer
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2
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3
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Choose the Best Answer

A

Structural unemployment

B

Frictional unemployment

C

Cyclical unemployment

D

Seasonal unemployment

Understanding the Answer

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Answer

The type of unemployment primarily addressed by achieving full employment equilibrium is called cyclical unemployment. This kind of unemployment happens when there is not enough demand for goods and services in the economy, leading to job losses during economic downturns. Full employment equilibrium means that the economy is operating at its best, where everyone who wants to work can find a job, and businesses are thriving. For example, during a recession, many people may lose their jobs because companies are not selling enough products, but when the economy improves, those jobs can come back, reducing cyclical unemployment. So, achieving full employment helps ensure that everyone has the opportunity to work, balancing the economy and making it stronger.

Detailed Explanation

Cyclical unemployment happens when the economy is doing poorly. Other options are incorrect because Some think structural unemployment is the main issue; Frictional unemployment is often confused with cyclical.

Key Concepts

cyclical unemployment
Topic

Full Employment Equilibrium

Difficulty

easy level question

Cognitive Level

understand

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