What the issues faced by government policymakers in their attempts to maintain full employment. Please explain...

What the issues faced by government policymakers in their attempts to maintain full employment. Please explain in more detail.

Expert Solution

The major problem which the government faces in implementing the full employment policy in the economy is that, the deficits in time of full employment tend to create inflation. Maintenance of full employment in an economy increases dangers of inflation. If excess of full employment exists, then the problem gets intensified. In such case, shortage of labour exists and this causes employers to offer more wages to attract more workers into the employers.
Full employment not always means that every worker will get work. If government policies have been successful in creating situation where there are jobs, more than workers, then the over full employment exists. In this case shortage of labour will be created in many industries.
The full employment of resources generally creates pressure in economy because of the higher demand for the goods and services which results in higher demand pull inflation, that is one of the greatest problems faced by the government and policy makers to maintain full employment in the economy.

Rahul Sunny answered 4 weeks ago

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