Which of the following is an outcome of prolonged unemployment?
A) an improvement in labor skills
B) an increase in the inflation rate
C) a decrease in frictional unemployment
D) a fall in potential GDP
E) an increase in the size of the labor force

Question

Quizplus · Accepted Answer

Prolonged unemployment leads to a fall in potential GDP as it reduces the economy's capacity to produce goods and services, resulting in lower output levels.

Which of the Following Is an Outcome of Prolonged Unemployment