In the Classical view of the macroeconomy, too many workers seeking work or unemployment will lead to
A) falling wages.
B) rising wages.
C) rising interest rates.
D) government programs to help the unemployed.

Question

Quizplus · Accepted Answer

In the Classical view, the labor market operates like any other market, where the supply of labor (workers seeking work) and the demand for labor (employers seeking workers) determine the wage rate. When there are too many workers seeking work (unemployment), the supply of labor exceeds the demand for labor, leading to a surplus of workers. This surplus puts downward pressure on wages as workers compete for a limited number of jobs. Therefore, in the Classical view, too many workers seeking work or unemployment lead to falling wages.

In the Classical View of the Macroeconomy, Too Many Workers