Question

Describe the problem of full employment of resources in an economy.

Answer 1

In macroeconomics, full employment of resources refers to a condition where all the resources in the economy is utilized and there is no deficient demand unemployment. However, there is always some level of unemployment that exists in an economy which is known as voluntary unemployment.
Moreover, if there is full employment of resources then it will lead to inflationary pressures within an economy as high demand for goods and services leads to higher demand-pull inflation, which is the major problem faced due to full employment.