When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium—back to full employment. Orthodox economists cite two mechanisms that cause the adjustment. Explain each of these.

When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium—back to full employment. Orthodox economists cite two mechanisms that cause the adjustment. Explain each of these.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter11: Labor Markets

Section: Chapter Questions

Problem 5SQ

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Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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