Full employment is everyone who wants a job and is willing and able to work is employed. True full employment is impossible. Considered to be full employment when the unemployment rate is between 4-6.4%. Reasons why there is no true full employment
Frictional unemployment- voluntary unemployment, people who leave a job to find a different job
Structural unemployment- changes in demand patterns. When and industry is no longer demanded you might get laid off so you have to change industries. Finance industry is currently the most demanded.
It is measured by the unemployment rate and is achieved by economic growth. To lower the unemployment rate to achieve full employment, produce more goods so there are more jobs. If you have more jobs the income increases which will help the the goal of improved standard of living.
A downside of full employment is you can become inefficient and inflation and unemployment are related.(Phillips curve)
Phillips cure
-When inflation is low, unemployment is high
Increased unemployment= lots of competition for jobs so the wages decrease>cost of production decrease>price goes down, inflation rate goed down
decreased unemployment= few competitors for jobs>wages go up>cost of production increases>prices go up,inflation rate goes up
Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)
Full employment is everyone who wants a job and is willing and able to work is employed. True full employment is impossible. Considered to be full employment when the unemployment rate is between 4-6.4%. Reasons why there is no true full employment
- Frictional unemployment- voluntary unemployment, people who leave a job to find a different job
- Structural unemployment- changes in demand patterns. When and industry is no longer demanded you might get laid off so you have to change industries. Finance industry is currently the most demanded.
It is measured by the unemployment rate and is achieved by economic growth. To lower the unemployment rate to achieve full employment, produce more goods so there are more jobs. If you have more jobs the income increases which will help the the goal of improved standard of living.A downside of full employment is you can become inefficient and inflation and unemployment are related.(Phillips curve)
Phillips cure
-When inflation is low, unemployment is high
Increased unemployment= lots of competition for jobs so the wages decrease>cost of production decrease>price goes down, inflation rate goed down
decreased unemployment= few competitors for jobs>wages go up>cost of production increases>prices go up,inflation rate goes up
Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)