Which of the following are true-

a) Full employment is an economic situation in which all available labor resources are being used in the most efficient way possible.

b) Marginal propensity to save can also be written as MPS = \(\frac{S}{Y}\)

a is true, b is not

The correct answer is Option 2: a is true, b is not

Statement a: Full employment is an economic situation in which all available labor resources are being used in the most efficient way possible. This is correct. Full employment embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time.

Statement b: Marginal propensity to save can also be written as MPS = \(\frac{S}{Y}\). This is incorrect. Marginal propensity to save denotes the ratio of change in consumption expenditure to change in income over a period of time. It can be denoted as MPS = \(\frac{ΔS}{ΔY}\)