Question

Why would a government want to achieve full employment?

Answer 1

If everybody is working, then the GDP (Gross Domestic Products) would rise drastically, as people  have more spending money, and the exchange of money grows. If everybody is employed, the GDP can rise drastically, as the exchange of money grows to almost maximum, and mostly everybody is happy.

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Answer 2

Answer:

What does full employment really mean? Full employment in an economic point of view does not necessarily mean everyone has a job. If employment drops beyond a certain point, it can generate price and wage pressures, which might spark an inflation. Therefore, economists refer to the term as the sweet spot, where employment is close to full and does not push prices up.

But, how does this full employment impact the economy? Well, there are several economic and societal benefits. It eliminates poverty and the chances of the unemployed to become de-motivated and de-skilled. Unemployment generally generates social problems such as crime and vandalism. Governments enjoy the drop in unemployment benefits, as well as the increase in government revenue through taxes (income tax & VAT) paid by the increase employed citizens, decreasing the need for governments to borrow. Therefore, spurring economic growth through all of these benefits.

Explanation: