Answer to Question #219771 in Macroeconomics for jordan

Question

Evaluate whether or not full empyment policy approach is effective in real life in achieving the desired level of GDP.

Answer 1

When the economy is at full employment, it makes it more difficult for businesses to hire workers. As a result, skilled workers can demand better compensation and benefits, which firms are more willing to grant. Individually, this can be beneficial, but it can be detrimental to the economy over time.