It means that it includes every possible measure. So for example in research methods you want to make sure that your variable is mutually exhaustive. I can't have my variable as "political party" and only include democrats and republicans. There are people that are moderates or independents, therefore my survey would exclude these people--->which is being biased, and pretty much sucky research. So you have to make sure that you include everyone or that your variable is mutually exhaustive.
