What economic issue arises when resources remain unused despite the benefits of full employment?

The economic issue that relates to resources remaining unused despite the potential benefits of full employment is best characterized by a recession. A recession occurs when there is a significant decline in economic activity across the economy, which is often reflected through high unemployment rates and underutilization of resources. During a recession, even though there may be a capacity for full employment, actual employment levels are low due to decreased demand for goods and services, leading to many resources, including labor, being idle.

This scenario highlights an economy's inability to take advantage of its available resources, resulting in wasted potential and stunted economic growth. The presence of unused resources indicates that the economy is not operating at its full productive capacity, reinforcing the connection between recession and resource underutilization. In contrast to other economic concepts like externalities, inflation, or deflation, the focus here is specifically on a situation where economic activity contracts rather than expands, leading to the unfortunate state of unused resources.