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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![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
0
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 W₁, 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fed74398d-fd76-4135-8bf9-f41e22535b14%2F8e039e47-38ba-4bec-8ecb-af62153bcf29%2F222g8e_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
0
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 W₁, 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
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