Which of the Following Types of Unemployment Can Exist in an Economy

question 70

Multiple Choice

Which of the following types of unemployment can exist in an economy that is at its potential output level?

• A) cyclical unemployment only
• B) structural unemployment only
• C) frictional, cyclical, and seasonal unemployment only
• D) frictional, seasonal, and structural unemployment only
• E) there will be no unemployment in an economy that is at the potential output level

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Definitions:

Free-rider Problem

A situation where individuals or entities receive the benefit of a good or service without contributing to its cost, commonly associated with public goods.

Market Failure

A situation where the allocation of goods and services is not efficient, often leading to a net social welfare loss.

Goods

Physical items produced for sale or use, characterized by their tangibility and their capacity to satisfy human wants or needs.

Free-rider Problem

A situation in which some individuals consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production, without contributing to its provision.