Cyclical Unemployment

question 192

Multiple Choice

Cyclical unemployment

• A) is always present in an economy.
• B) is higher during an expansion.
• C) fluctuates over the business cycle.
• D) decreases during a recession.

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Definitions:

Marginal Product of Labor

The additional output produced as a result of employing one more unit of labor, holding other inputs constant.

Equilibrium Outcome

This term describes a state in a market or game where all participants' actions are balanced, and no incentive exists to deviate from the chosen strategy.

Monopoly Wage Rate

The wage setting behavior of a monopolist employer who might set wages below competitive levels due to lack of competition in the labor market.

Competitive Wage Rate

The equilibrium wage set in a market where the demand for labor meets the supply, with no individual employer able to influence the wage rate.