Which of the following contributes to the natural rate of unemployment?

Question

Quizplus · Accepted Answer

All of the options - unions, efficiency wages, and job search - contribute to the natural rate of unemployment. Unions can raise wages above the market clearing level, making it harder for firms to hire workers. Efficiency wages can cause firms to pay higher wages to deter shirking, which can lead to some workers being unemployed because firms may not want to hire workers at that wage rate. Finally, job search refers to the process of finding a job, which takes time and can lead to a temporary spell of unemployment. Thus, all of these factors contribute to the natural rate of unemployment.

Which of the Following Contributes to the Natural Rate of Unemployment