What Does the Existence of Labor Unions Mean for the Labor

question 28

Multiple Choice

What does the existence of labor unions mean for the labor market and for unemployment?

• A) Wage rates could rise above equilibrium level.
• B) Wage rates could fall below equilibrium level.
• C) Unemployment could reach zero.
• D) Unemployment could grow to unsustainable levels.

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Definitions:

Unemployment Rate

The rate of unemployment among people actively looking for work in the labor force.

Discouraged Workers

Individuals who are not actively looking for work because they believe no jobs are available for them or there are no positions for which they qualify.

Underemployed Workers

Individuals working less than they would like to or in positions that do not utilize their skills or education level.

Labor Force

The total number of people employed or seeking employment in a country or region.