Refer to the Following Figure When Answering
Figure $\bar W$

question 12

Multiple Choice

Refer to the following figure when answering
Figure 15.2: The Labor Market
-In the stylized DSGE model for the labor market displayed in Figure 15.2, the line marked $\bar W$ is due to which of the following?
i. Cyclical unemployment
ii. Sticky prices
iii. The natural rate of unemployment

• A) iii
• B) i and ii
• C) i
• D) ii
• E) None of these answers are correct.

---

Definitions:

Labor Force

The total number of people, including both employed and unemployed individuals, who are actively seeking work.

Unemployment Rate

The ratio of the workforce that is in a state of joblessness while searching for work opportunities.

Unemployment Insurance

A government program that provides temporary financial assistance to individuals who are unemployed through no fault of their own.

Discouraged Workers

Individuals not actively seeking employment due to believing no jobs are available for them, not considered in the count of the unemployed.