If the Wage Demands of Workers Are High Relative to the Prices

question 6

Multiple Choice

If the wage demands of workers are high relative to the prices of products,:

• A) cyclical unemployment will be higher.
• B) cyclical unemployment will be lower.
• C) frictional unemployment will be lower.
• D) structural unemployment will be higher.

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Definitions:

Greater Inequality

Refers to an increase in the unequal distribution of resources, wealth, or opportunities within a society or between different societies.

Income Distribution

The way in which a nation’s total earnings are spread among its population, affecting economic inequality.

Total Income

The aggregate amount of money earned or received by an individual or entity from all sources before any deductions.

Equality-Efficiency Trade-Off

The compromise between ensuring an equitable distribution of resources and reaching the highest level of economic efficiency.