In a dynamic economy under ideal conditions,
A) the unemployment rate should be near zero.
B) some unemployment would be present due to workers temporarily being out of work while changing jobs.
C) unemployment would tend to move upward slightly as prices increased.
D) unemployment would tend to move slightly downward as unemployment compensation benefits increased.

Question

Quizplus · Accepted Answer

In a dynamic economy under ideal conditions, there will be some unemployment due to workers temporarily being out of work while changing jobs. This is known as frictional unemployment and is considered to be a natural part of a healthy, dynamic economy. Option A is incorrect because a zero unemployment rate is not a realistic or desirable goal, and would actually indicate a stagnant or unproductive economy. Option C is incorrect because there is no direct relationship between unemployment and prices, although inflation can cause changes in unemployment. Option D is incorrect because unemployment compensation benefits may provide a temporary safety net for workers, but do not directly impact the overall unemployment rate.

In a Dynamic Economy Under Ideal Conditions