Certified Supply Chain Professional (CSCP) Practice Exam

Full employment includes only which types of unemployment?

1. Cyclical and seasonal

2. Frictional and structural

3. Frictional and cyclical

4. Structural and temporary

The correct answer is: Frictional and structural

Full employment refers to a situation in which all available labor resources are being used in the most efficient way possible. It does not mean that there is no unemployment at all; instead, it recognizes that certain types of unemployment are inevitable and acceptable within a healthy economy. Frictional unemployment is the short-term unemployment that occurs when people are temporarily between jobs or are entering the workforce for the first time. This type of unemployment is a natural part of the job search process, reflecting the time it takes for individuals to find positions that match their skills and preferences. Structural unemployment arises from shifts in the economy that create a mismatch between the skills of the workforce and the skills needed for available jobs. This can happen due to technological advancements, changes in consumer demand, or other significant economic transformations. Like frictional unemployment, structural unemployment is considered a normal part of a dynamic economy as industries evolve. Both frictional and structural unemployment are seen as acceptable under full employment because they reflect the natural mobility and adaptability of the workforce. In contrast, cyclical unemployment is a result of economic downturns and is not consistent with full employment, as it indicates that there are insufficient jobs available due to a decrease in demand. Therefore, recognizing frictional and structural unemployment as part of the