In the Classical Model, What Occurs If a Wage of $20/hour

question 91

Multiple Choice

In the classical model, what occurs if a wage of $20/hour results in unemployed workers?

• A) The workers will go on strike to demand that more jobs be created.
• B) Producers will quickly create more jobs and hire the unemployed workers, so unemployment is short-lived.
• C) The wage rate will drop, more workers will be hired, and the unemployment rate falls.
• D) The government will step in and order firms to hire more workers.

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Definitions:

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The initial wage or remuneration an employee receives when beginning a new job.

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