Involuntary unemployment
A. exists when there is a shortage of labor.
B. exists when there is an excess quantity of labor supplied.
C. will increase as the wage rate falls.
D. occurs when the wage rate is below the equilibrium wage rate.
Answer: B
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To determine whether two goods are substitutes or complements, an economist would estimate the:
a. price elasticity of demand. b. income elasticity of demand. c. cross-elasticity of demand. d. price elasticity of supply.
If it is impossible or very costly to exclude nonpaying customers from receiving a good, the good is considered to be
a. freeware. b. nonexcludable. c. a common good. d. a receiving good.
According to the "animal spirits" described by Keynes, when optimism reigns, households and firms
a. increase spending which results in inflationary pressures. b. decrease spending which results in deflationary pressures. c. increase spending which results in deflationary pressures. d. decrease spending which results in inflationary pressures.
The natural rate of unemployment is equal to the unemployment rate when there is only:
A. structural and cyclical unemployment. B. structural and frictional unemployment. C. frictional unemployment. D. cyclical unemployment.