Frictional Unemployment Is

question 5

Multiple Choice

Frictional unemployment is

• A)not inevitable;rather,it can be reduced to zero by well-designed public policies.
• B)not inevitable;rather,it could be reduced to zero if by the elimination of unemployment insurance.
• C)inevitable,because at any given time,jobs are being created in some firms and destroyed in other firms.
• D)inevitable,because in some industries,wages are always set above the level that brings supply and demand into equilibrium.

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Definitions:

Aggregate Demand

The relationship between the economy’s price level and aggregate output demanded, with other things constant.

Equilibrium Output

The level of output at which the quantity of goods produced equals the quantity of goods demanded.

Price Level

A measure of the average price of goods and services in an economy, which can indicate the inflation rate or cost of living.

Aggregate Output

The total value of goods and services produced in an economy over a specific period, measuring the economy's overall production.