During the early 1990s, companies started downsizing. One of the results of this downsizing was the permanent reduction in the number of middle management positions. This change in the way businesses operate would have:
A) not affected the natural rate of unemployment.
B) increased the natural rate of unemployment.
C) decreased the natural rate of unemployment.
D) either increased or decreased the natural rate of unemployment.

Question

Quizplus · Accepted Answer

Downsizing and reducing middle management positions could increase the natural rate of unemployment as it leads to more displaced workers and a smaller job pool for those seeking employment.

During the Early 1990s, Companies Started Downsizing