11. The diagram below depicts the aggregate labour market. Why might the wage rate remain at W₁, and how would you label the distance b-a? Real wage rate W₁ AS, AD₁ Number of workers (a) The rate cannot stay at W₁, b-a is equilibrium unemployment (b) The efficiency wage hypothesis explains why the rate may stay at W,₁, b-a is disequilibrium unemployment (c) The actions of trade unions explain why the wage will remain at W₁, b-a is frictional unemployment (d) The introduction of the minimum wage keeps the rate at W₁, b-a is frictional unemployment
11. The diagram below depicts the aggregate labour market. Why might the wage rate remain at W₁, and how would you label the distance b-a? Real wage rate W₁ AS, AD₁ Number of workers (a) The rate cannot stay at W₁, b-a is equilibrium unemployment (b) The efficiency wage hypothesis explains why the rate may stay at W,₁, b-a is disequilibrium unemployment (c) The actions of trade unions explain why the wage will remain at W₁, b-a is frictional unemployment (d) The introduction of the minimum wage keeps the rate at W₁, b-a is frictional unemployment
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
Section: Chapter Questions
Problem 41CTQ: Unemployment rates have been higher in many European countries in recent decades than in the United...
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