Business Environment, 1st Edition by Pearson

| 148 | Part II: Economic Systems and Policies

Relating to Business

(iii) Full employment: The economy is said to be at full employ-

ment when everyone who is prepared to work at the existing

level of wages for his type of labour fi nds employment. There

is, at any point of time, a small amount of unemployment since

it takes time to switch from one job to another. It is impossible

for every job seeker to fi nd a job in a fast-evolving dynamic

economy which witnesses changes in demand and supply, the

development of more effi cient capital, an expanding national

income and the creation of new wants. Thus, the full employ-

ment level of the GDP can be thought of as measuring full-

capacity output—the largest output of which the economy is

capable ...