Unemployment, at the aggregate level
A) is zero in a perfect world.
B) is a sign of market failures.
C) is avoidable.
D) can be prevented with sound government policy.
E) is consistent with a well-functioning economy.

Question

Quizplus · Accepted Answer

Unemployment is a natural part of any economy, even a well-functioning one, as it reflects the dynamic nature of the labor market with workers entering and exiting jobs. While government policies can help alleviate the negative impacts of unemployment, such as providing job training programs and unemployment insurance, it cannot be entirely prevented. Therefore, the correct answer is E – unemployment is consistent with a well-functioning economy.

Unemployment, at the Aggregate Level