Google
Friday 
April 24, 2015 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
Today's Index
Yesterday's Index
248.6

Help us compile the AmosWEB Free Lunch Index. Tell us about your last lunch.

Skipped lunch altogether.
Bought by another.
Ate lunch at home.
Brought lunch from home.
Fast food drive through.
Fast food dine in.
All-you-can eat buffet.
Casual dining with tip.
Fancy upscale with tip.

More About the Index
Best 10?

10.
Ten.
X.
1010.
Tin.
Diez.

CARDINAL: A measurement based on a scale or quantitative numbers, such as 1, 5, or 357.2, that enables a comparison in magnitude. Comparability means, for example, that the difference between 5 and 2 is the same as the difference between 12 and 9. Measures such as height and weight use cardinal numbers. Most economic measures are based on cardinal numbers, including gross domestic product, unemployment rate, the price of chocolate, and the quantity of wheat produced. The benefit of cardinal measurement is the ability to directly compare one measure with another. If, for example, the price of chocolate is $1 a pound and the price of wheat is $4 a pound, then wheat is four times more expensive than chocolate. Ordinal measures, which involve relative ranking, is an alternative type of measure.

Visit the GLOSS*arama


FULL EMPLOYMENT:

The state that occurs when all of the economy's resources are engaged in the production of output. In practice, an economy is considered to be at full employment when the unemployment rate is around 5 to 5 1/2 percent and the capacity utilization rate of capital is about 85 percent. This is one of the five economic goals and three macroeconomic goals.
Full employment is achieved in principle when all available resources (labor, capital, land, and entrepreneurship) are used to produce goods and services. This goal is commonly indicated by the employment of labor resources (measured by the unemployment rate). However, all resources in the economy--labor, capital, land, and entrepreneurship--are important to this goal. The economy benefits from full employment because resources produce the goods that satisfy the wants and needs that lessen the scarcity problem. If the resources are not employed, then they are not producing and satisfaction is not achieved.

Graphical Indications

Production Possibilities
Production Possibilities
Aggregate Market
Aggregate Market
Full employment plays in important role in several graphical analyses. The two most common are the production possibilities model and the aggregate market model (or AS-AD analysis).
  • Production Possibilities: Full employment is indicated by the boundary of the production possibilities frontier. The production possibilities frontier is constructed under the assumption that all available resources are engaged in production of two goods. As such being on the frontier is, by definition, tantamount to full employment.

  • Aggregate Market: Full employment is indicated by the position of the long-run aggregate supply curve. The long-run aggregate supply curve is constructed based on the assumption that flexible prices have adjusted to achieve equilibrium in all markets. Most important, resource markets are in equilibrium, with quantities demanded equal to quantities supplied. In other words, for the labor market, the number of jobs available matches the number of workers available.

Natural Unemployment

Full employment is usually equated with natural unemployment, which is the amount of unemployment consistent with an expanding, growing economy that has no inflation. This is usually considered the combination of structural and frictional unemployment, but no cyclical unemployment.

Historical evidence indicates that a 5 to 5 1/2 percent unemployment rate meets these conditions. If the unemployment rate drops much below 5 to 5 1/2 percent, then the inflation rate increases, suggesting that the economy is trying to produce more output than it is capable of doing. However, some contend that full employment exists at a higher unemployment rate, while others argue that a lower unemployment rate is correct.

The Politics of Full Employment

The macroeconomic goal of full employment would seem to be universally acknowledged as a beneficial pursuit. That, however, is not necessarily the case. At the very least, some are extremely passionate about achieving full employment. Others might even find full employment somewhat objectionable.

Consider the two basic political philosophies--liberals and conservatives.

  • Liberals: Those who comprise the working class and occupy the lower end of the income spectrum, tend to favor the pursuit of full employment more than most. They are the ones most likely harmed by unemployment and thus to benefit from full employment. Liberal politicians count these folks among their core constituency.

  • Conservatives: Those who own businesses and are on the employer side of labor markets tend to be less inclined to think full employment is a beneficial state of the economy. Because everyone already has a job, full employment makes it more difficult and costly to hire new workers. A little bit of unemployment tends to make hiring easier. Conservative politicians count these folks among their core constituency.

<= FRICTIONAL UNEMPLOYMENTFULL EMPLOYMENT, LONG-RUN AGGREGATE SUPPLY =>


Recommended Citation:

FULL EMPLOYMENT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2015. [Accessed: April 24, 2015].


Check Out These Related Terms...

     | macroeconomic goals | economic goals | stability | economic growth | microeconomic goals | efficiency | equity |


Or For A Little Background...

     | macroeconomics | production | production possibilities | production possibilities curve |


And For Further Study...

     | mixed economy | economic analysis | seven economic rules | economic system | government functions | political views | full employment, production possibilities | unemployment, production possibilities |


Search Again?

Back to the WEB*pedia


APLS

State of the ECONOMY

Federal Discount Rate
April 14, 2015
0.75%
Steady

More Stats

BLACK DISMALAPOD
[What's This?]

Today, you are likely to spend a great deal of time watching the shopping channel seeking to buy either a birthday gift for your mother or a weathervane with a horse on top. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
Your Complete Scope

This isn't me! What am I?

In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
"You have to find something that you love enough to be able to take risks, jump over the hurdles and break through the brick walls that are always going to be placed in front of you. If you don't have that kind of feeling for what it is you're doing, you'll stop at the first giant hurdle. "

-- George Lucas

BA
Bank Acceptance
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2015 AmosWEB*LLC
Send comments or questions to: WebMaster