Lesson Plan

• Define full employment and distinguish it from zero unemployment.
• Explain the natural rate of unemployment and its frictional and structural components.
• Apply the equation u = u* to determine when an economy is at full employment.
• Analyse how monetary, fiscal and supply‑side policies aim to maintain full‑employment output.
• Evaluate the consequences of deviating from the natural rate of unemployment.

• Projector and screen
• Whiteboard and markers
• Handout summarising NRU, NAIRU and full‑employment output
• Calculator or spreadsheet
• Printed AD‑AS diagram showing Y_FE
• Sticky notes for exit tickets

Begin with a quick poll: “If everyone who wants a job has one, is the economy at full employment?” Discuss responses to surface misconceptions. Link the question to prior knowledge of unemployment types and set the success criteria: students will be able to state the formal definition of full employment and identify its unavoidable components.

1. Do‑now (5’) – Write a brief answer to the opening poll question; share a few responses.
2. Mini‑lecture (10’) – Present the definition of full employment, the equation u = u*, and the concepts of NRU and NAIRU using slides.
3. Interactive worksheet (12’) – In pairs, examine the table of unemployment types and mark which persist at full employment; complete a short worksheet.
4. Diagram analysis (8’) – Display the AD‑AS diagram, locate Y_FE, and discuss why AD intersecting LRAS represents full employment.
5. Policy debate (10’) – Small groups argue the merits of monetary/fiscal versus supply‑side policies for keeping u ≈ u*; each group presents a 1‑minute summary.
6. Check for understanding (5’) – Quick quiz (Kahoot or printed) with three concept questions.
7. Exit ticket (5’) – Students write one key takeaway and one lingering question on a sticky note.

Recap the formal definition of full employment and the role of the natural rate of unemployment. Collect exit tickets to gauge understanding and assign homework: read the textbook section on structural unemployment and prepare a short paragraph proposing a supply‑side policy to shift the natural rate downward.