Full employment
Definition. Full employment is the situation in which the economy is using its labour resources at a sustainable maximum, so that everyone willing and able to work at the going wage rate can find a job. It does not mean zero unemployment, since some frictional and structural unemployment remains.
At full employment the economy operates on its long run aggregate supply curve, and further increases in aggregate demand raise the general price level rather than real output.
This term belongs to Aggregate Demand and Aggregate Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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