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

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 2P

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Similar questions

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