The equilibrium unemployment rate cannot be equal to zero because:
A)demand and supply can never reach equilibrium in labor markets.
B)it is the sum of the frictional and structural unemployment rates.
C)of the existence of cyclical unemployment.
D)of the minimum wage law.

Question

Quizplus · Accepted Answer

The equilibrium unemployment rate is the sum of the frictional and structural unemployment rates. These types of unemployment are caused by factors such as workers changing jobs, technological advancements leading to changes in industry structures, and skill mismatch between workers and available jobs. These factors are inherent in any economy and therefore, the equilibrium unemployment rate cannot be reduced to zero.

The Equilibrium Unemployment Rate Cannot Be Equal to Zero Because