Unemployment Tends to Go Up When Aggregate Demand Falls Mainly

question 12

Multiple Choice

Unemployment tends to go up when aggregate demand falls mainly because

• A) when wages fall, workers seek alternative employment.
• B) unions renegotiate for lower wages, making it difficult for job searchers to find suitable jobs.
• C) wage rates then to be downward rigid.
• D) most human capital is general and not firm-specific.

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Definitions:

Intractable Ruling Classes

Powerful societal groups that are resistant to change and maintain their position through control of resources and institutions.

Disadvantaged

Individuals or groups lacking in advantage, opportunity, or resources, often due to socio-economic conditions.

Political Resources

Assets, connections, or tools available to individuals, groups, or states to influence political outcomes or decisions.

Non-Unionized

Denotes workplaces or employees that are not members of a labor union, and therefore typically do not have collective bargaining rights for wages and working conditions.