Full employment refers to a situation in which all available labor resources are being used in the most efficient way possible. This does not mean zero unemployment, but rather that the level of unemployment is at its natural rate, where any remaining unemployment is due to frictional or structural factors rather than cyclical issues. Full employment is crucial for economic stability and growth, as it ensures that resources are maximized, influencing various aspects such as fiscal policies, monetary strategies, and overall economic health.
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