A very low level of unemployment can potentially lead to what kind of problem?
A) Overheated demand.
B) Labour shortages.
C) Increase in inflation.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

A very low level of unemployment means that there are fewer available workers, causing an increase in demand for the remaining workers. This can lead to overheated demand and labour shortages, which in turn can lead to an increase in wages and prices, causing inflation to rise. Therefore, all of the above options are potential problems associated with a very low level of unemployment.

A Very Low Level of Unemployment Can Potentially Lead to What