Regarding the Categories of Unemployment, Which Statement Best Describes How

question 189

Multiple Choice

Regarding the categories of unemployment, which statement best describes how the effect of sectoral changes compares to the effect of firms paying higher-than-equilibrium wages?

• A) Sectoral changes create frictional unemployment, while firms paying wages above equilibrium create structural unemployment.
• B) Sectoral changes create structural unemployment, while firms paying wages above equilibrium create frictional unemployment.
• C) Sectoral changes and firms paying wages above equilibrium both create structural unemployment.
• D) Sectoral changes and firms paying wages above equilibrium both create frictional unemployment.

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