Full employment is a situation in which _______

1. Analyze the question The question asks for the definition of full employment in economics.

2. Explain the concept Full employment does not mean that literally every person in the population has a job. It means that everyone who is able, willing, and looking for work (the labour force) can find a job at the prevailing wage rate. Some unemployment still exists even at full employment, such as:

• Frictional unemployment (people between jobs)
• Structural unemployment (skills mismatch)
• Seasonal unemployment

This is often called the "natural rate of unemployment."

3. Evaluate each option

• A. Every adult is employed. Wrong. This is unrealistic, because it includes people who are unwilling or unable to work (students, retirees, full-time homemakers).
• B. Only the disabled are not employed. Wrong. It ignores the frictional and voluntary unemployment that exists even at full employment.
• C. All adults who can work are employed. Close, but too absolute. It suggests there is zero unemployment, and it leaves out the idea of willingness and availability of jobs.
• D. All those who are able and eligible can find employment. Correct. It captures the idea that anyone in the labour force who is able and qualified to work can find a job.

4. Answer The best option is D.

5. Exam tip Remember: Full employment ≠ zero unemployment. Look for wording like "able and willing" or "can find employment." Options with absolute words like "every" or "all are employed" are usually traps.