Unemployment can exist in a market clearing model, if:
A)the labour market is in disequilibrium.
B)we allow capital utilization of less than 100%.
C)we allow for differences among workers and jobs.
D)all of the above.

Question

Quizplus · Accepted Answer

Unemployment can exist in a market-clearing model if we allow for differences among workers and jobs, such as variations in skills, preferences, and job locations. This heterogeneity can lead to situations where not all workers find jobs that match their skills or preferences even when the market "clears," meaning supply equals demand overall.

Unemployment Can Exist in a Market Clearing Model, If