Newly released data shows that the U.S. unemployment rate was 6.2% in Feb 2021, whereas the Euro area unemployment rate was 8.3%. In fact, the U.S. has almost always (with a few exceptions) had a lower unemployment rate compared to the Euro area. Which is most likely not a reason to explain the above scenario? O The wage in Euro area is too high. Euro firms have shifted from hiring local workers to hiring in countries that have cheaper labor O Higher relative wages for skilled laborers in the US has decreased the unemployment rate O Euro area has generous unemployment insurance to guarantee worker benefits, which increases the unemployment rate O US has relatively stronger unions compared to the Euro area, which decreases the unemployment rate
Newly released data shows that the U.S. unemployment rate was 6.2% in Feb 2021, whereas the Euro area unemployment rate was 8.3%. In fact, the U.S. has almost always (with a few exceptions) had a lower unemployment rate compared to the Euro area. Which is most likely not a reason to explain the above scenario? O The wage in Euro area is too high. Euro firms have shifted from hiring local workers to hiring in countries that have cheaper labor O Higher relative wages for skilled laborers in the US has decreased the unemployment rate O Euro area has generous unemployment insurance to guarantee worker benefits, which increases the unemployment rate O US has relatively stronger unions compared to the Euro area, which decreases the unemployment rate
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 2P
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