Frictional Unemployment

question 83

Multiple Choice

Frictional unemployment:

• A)refers to unemployment caused by friction between labor and management.
• B)comes from people entering the labor force and changing jobs.
• C)refers mainly to unemployment resulting from fluctuations in output.
• D)is undesirable and should be eliminated at all costs.

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Definitions:

Binding Price Ceiling

A government-imposed limit on how high a price can be charged for a product, set below the market equilibrium price, leading to shortages.

Decreases

A reduction in size, quantity, or degree; the opposite of increases.

Tax

A mandatory monetary fee or tax levied by a government on individuals or organizations to finance public spending.

Price Elasticity

An indicator of the sensitivity of the demand for a product to fluctuations in its price.