I am a bit confused about the term "full employment".
I am currently learning about the labour market model, and how that is influenced by changes in aggregate demand. My textbook states "As increased output requires increased production, this will result in increased demand for labour. This is shown on the graph above as the movement from Y1 to Y2. The gap between Y2 and the full employment level is reduced, therefore unemployment is reduced (and the recessionary gap is lessened)."
Does this mean that "full employment" is talking about everybody in the country being employed, or is it talking about the full employment of resources, which include workers? And is the aggregate demand which is seen in the graph below separate to the labour market model demand?