Many economists think that, in the long run, the economy tends to move toward

Question

Quizplus · Accepted Answer

The natural or full-employment rate of unemployment is the rate at which the economy is producing at potential or full capacity. In the long run, economic forces such as technological progress, market competition, and changes in demographics tend to shift the economy toward this natural rate of unemployment. This is because as the economy grows, it creates more jobs and reduces unemployment, and as wages rise, it becomes more expensive for firms to hire more workers, which can lead to a reduction in employment. Therefore, option A is the correct choice.

Many Economists Think That, in the Long Run, the Economy