Answer to Question #210224 in Macroeconomics for Corni

Question

200 people are currently unemployed to structural changes in the Zawa Province but the economy is currently producing at their full potential of $45 billion. Then the economy in context is producing at full employment

Answer 1

Solution:

Yes, the economy in context is producing at full employment.

Full employment means that all available resources are being utilized efficiently and that the economy is operating at its full productive potential. Therefore, it means that anybody whether skilled or unskilled can be employed within the economy at any given time.

Achieving full employment can be extremely difficult for any economy. Therefore, structural employment which is unemployment caused by a mismatch between skills and jobs, or other technological changes in the economy is a type of full employment. This is because jobs are still available except for the mismatch in skills required. It falls under the natural rate of unemployment which represents only the amount of unemployment as a result of structural and frictional factors in the economy.